Actually, since a custom template is supposed to be generic and usable for all your auctions, you don't actually insert your individual auction image URLs into the template itself. You would add the image as wahm922 suggested:
<img src="[IMAGE1_URL400x300]">
and then when you are on the listing page creating the auction, you would select your custom template, and then select your images. When you post the auction, the [IMAGE1_URL400x300] will be automatically replaced with the appropriate URL for a 400x300 version of the first image you selected on the listing page so you don't have to worry about it. Hope that makes sense!