I'm trying to place a large logo on top of the page. I want it to look like the attached example. In previous versions I used to modify the template.css file and added something like
On the right hand side of the Theme editor page next to your copy of Vanilla, there should be a button 'Theme options'.
There is a section labelled 'Logo' and you can upload an image using the button at the very bottom. Then just select the image in the popup.
You might need to style it with CSS to centre it though.
So solution to your problem, but you should use the PNG format instead of the JPEG format for your logo. The JPEG compression makes it looking very bad quality, washed out.
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