Try the following:

Create Cursor curTest (image blob)
Append Blank
*!* Select a jpg file from your harddrive here:
Replace image with FileToStr(GetFile())
?CursorToXML("curTest", "lcTest", 1, 0, 0, "1")
?XMLToCursor(lcTest, "curTest2")

Observe that after the cursor has been translated to xml and back, the image field is no longer a BLOB, but a MEMO field.