I’m taking the same Lynda wp child themes class as shepme (I’ve also designed in HTML & CSS for a couple years), and have the same problem. I found the coding solution mentioned above in the course’s FAQ, however it does not tell you that image must be reloaded from the wp dashboard as Mor10 thankfully pointed out.
Perhaps this is a “no brainer”, but to us newbs, not so much.
Mor10, you mentioned other issues caused by the twentyten 3.4 update. Do tell!! I’d like to have some hair left to pull after this course.