i'm not sure where your problem is, but my very best guess would be:
your image location is not suitable! (ignore the other classes, it's just a test project ^^)
i've copy/pasted your code, i used my custom image and it works fine with me!
make an folder in your eclipse project BUT NOT IN YOUR SOURCE dir (!!!) and then refer to the image like this:
Image img1 = Toolkit.getDefaultToolkit().getImage("img/index.png");