Mark,
I realize that not everyone is a "graphic's wiz" but when the text prompts you to name the image "77.gif" it means that the image must be formatted as a GIF file. You have been uploading a JPG file which is then uploaded as "77.gif.jpg".
Your issue may be a Windows problem. Mr. Gates and team saw fit to hide file extensions from users (ala Mac) and this causes people to rename files but not actually effect the file extension. To fix this users have to opt to show these hidden file extensions.
When in a Windows directory go to:
Tools > Folder Options > View
and uncheck "Hide extensions for known file types"
However you will still need to re-save the image as a GIF file first before you try to rename it. Otherwise you might end up with "77.gif.gif".

Thanks,
Jim