OK, with a number of Lineage 1 sites going down, thought I would post this here for others.
To add an emblem to your pledge/clan, you need to save an image that is 16x12 and 24bit .bmp format.
You can do this by opening a .gif or other image file in something like MS Paint or other software. If using MS Paint, click the Resize button on the tool bar and click Pixel rather than Percentage. Change first value to 16 and it should autopopulate the other with 12. Now save the image, but change it to 24bit - .bmp format.
Save the image file to the Lineage root directory. Log into the game as the royal. Click on the Handshake icon at the bottom right. Click on Bloodpledge Options. Down towards the bottom is Save Emblem. Simply type in the image name with the .bmp file extension.
That should do it!
Thanks Synister for your helpful information.