I have some questions surrounding the running iRacing app and this tool
I'm trying to use your application but cant seem to get off the ground..

I'll start small

1. On the same machine as the tool I'm running an instance of iRacing using a replay.. (Can replays be used to develop an overlay?) if I cant then what?
2. Using the theme editor I'm adding a Widget..
2a. I've pulled in an image that I want to use as a title banner.
2b. Next I've added a widget to the environment.. And in the properties panel I've changed its name.
2c. From the widgets property panel.. Ive opened the background property of the widget and added the image that I've pulled into the project by
selecting it from the list displayed.

The image is not showing up. What did I miss?
Ive tried compiling the project and then pressing start.. I get nothing.
There is no "preview" in the overlay preview window.

Ive started the "ATVO" application and tried to load the compiled project as the overlay.. nothing show up... I'm lost

Replays work but will give you very limited and sometimes wrong information. It may be fine to develop overlays on so you at least get some data, but it won't be a good experience to "broadcast" a replay.

For the widget image it sounds like you may have added it to the "Default image" property. Instead, you need the "Static background - Image" property. The default image is for dynamic images with data binding (the fallback in case there is no valid data binding).