Can I set image as a title to UINavigationBar?

You can use an UIImageView for the UINavigationItem.titleView property, something like:

self.navigationItem.titleView = myImageView;

I find that a transparent .png at about 35px in height has worked well.

- (void)awakeFromNib {

//put logo image in the navigationBar

UIImageView* img = [[UIImageView alloc] initWithImage:[UIImage imageNamed:@"logo.png"]];
self.navigationItem.titleView = img;
[img release];

}

I have created a custom category for UINavigationBar as follows

UINavigationBar+CustomImage.h

#import <UIKit/UIKit.h>

@interface UINavigationBar (CustomImage)
    - (void) setBackgroundImage:(UIImage*)image;
    - (void) clearBackgroundImage;
    - (void) removeIfImage:(id)sender;
@end

UINavigationBar+CustomImage.m

#import "UINavigationBar+CustomImage.h"

@implementation UINavigationBar (CustomImage)

- (void) setBackgroundImage:(UIImage*)image {
    if (image == NULL) return;
    UIImageView *imageView = [[UIImageView alloc] initWithImage:image];
    imageView.frame = CGRectMake(110,5,100,30);
    [self addSubview:imageView];
    [imageView release];
}

- (void) clearBackgroundImage {
    NSArray *subviews = [self subviews];
    for (int i=0; i<[subviews count]; i++) {
        if ([[subviews objectAtIndex:i]  isMemberOfClass:[UIImageView class]]) {
        [[subviews objectAtIndex:i] removeFromSuperview];
    }
   }    
}

@end    

I invoke it from my UINavigationController

[[navController navigationBar] performSelectorInBackground:@selector(setBackgroundImage:) withObject:image];

I modified the UINavigationBar+CustomImage.m to have the title still visible to the user. Just use insertSubview: atIndex: instead of addSubview:

UINavigationBar+CustomImage.m

#import "UINavigationBar+CustomImage.h"

@implementation UINavigationBar (CustomImage)

- (void) setBackgroundImage:(UIImage*)image {
    if (image == NULL) return;
    UIImageView *imageView = [[UIImageView alloc] initWithImage:image];
    imageView.frame = CGRectMake(0, 0, 320, 44);
    [self insertSubview:imageView atIndex:0];
    [imageView release];
}

- (void) clearBackgroundImage {
    NSArray *subviews = [self subviews];
    for (int i=0; i<[subviews count]; i++) {
        if ([[subviews objectAtIndex:i]  isMemberOfClass:[UIImageView class]]) {
        [[subviews objectAtIndex:i] removeFromSuperview];
    }
   }    
}

@end

Just use

[navController.navigationBar insertSubview:myImage atIndex:0] ;

where myImage is of type UIImageView and navController is of type UINavigationController