How to apply textures?

How do I apply aimage as a texture and have it visible when i render ascene? The way i tried was to open the image in the UV/Image editor and put the mesh into edit mode and click on the image name in the selection bar in the UV/image editor, the texture shows up on the mesh but when i render it it only shows a flat gray mesh. BTW i am using 2.46

You will have to select Texface in the material buttons or save the image and add an image texture to the material and in the map input be sure to select UV and not Orco