Add app/assets/images and include the rails.png as a sample there

railties/lib/rails/generators/rails/app/app_generator.rb

@@ -89,10 +89,6 @@ def public_directory
       directory "public", "public", :recursive => false
     end
 
-    def images
-      directory "public/images"
-    end
-
     def script
       directory "script" do |content|
         "#{shebang}\n" + content
@@ -219,10 +215,6 @@ def create_public_files
         build(:public_directory)
       end
 
-      def create_public_image_files
-        build(:images)
-      end
-
       def create_script_files
         build(:script)
       end

railties/lib/rails/generators/rails/app/templates/public/index.html

@@ -59,7 +59,7 @@
 
 
       #header {
-        background-image: url("images/rails.png");
+        background-image: url("/assets/rails.png");
         background-repeat: no-repeat;
         background-position: top left;
         height: 64px;