ForeCast,
This is a multi-step prcess, and I hope I can explain it clearly to you.
Open iPhoto and drag the image you wish to use to the desktop, close iPhoto.
Open Preview>File>Open and select the image you want and click Open. (It will open as being huge and you need to reduce the size, use COMMAND- to reuce the size (did 7 clciks for this one)
Then go tp Preview menu, clcik tolls>Annotate>Add Text, (click on the icon in the bottom left with the text in a square if it does not self select) Then in the size tab make it the largest font There will be grey dots with a cursor in it. Type what you want, in this case I typed a upper case W. you can drag from the center of the square of the dots to center it. Now click the red close screen butto in the upper left. (it sgould ask if you want save, click Save)
Then double click on the image to open it, and press COMMAND A, then COMMAND C, Quit Preview. Then click an empty space on the desktop so that nothing is highlighted, and opens the finder menu.
Now click on File in the Finder menu and click New Folder. Click on a blank spot on the desktop so that nothing is highlighted.
Then click on the new folder to highlight it (one click) and press COMMAND I to open the info window.
In the upper left you will see "untitled Folder" click once on that to highlight it, press COMMAND V.
Youe image should show up, you can close that, and then click twice on the bottom of the untitled folder (About a 1 second clcik between clicks, and it should turn white click in there to put your cursor in, and type the name you want to call it. When done typing, just click on a blank spot on the desk top and you should be done.
I hope you were able to follow my convoluted directions and have sucsess.
Feel free to ask questions.
Here are some screen shots of my" iPhone W Folder"


Hope this helps