I tried all these answers for my problem, and none of them worked. I asked a friend and he answered my problem perfectly. Create a source folder called Images (ie if you're using eclipse, right-click your project -> new ->sourceFolder). Call it whatever you want, i called my Images. Put some images in it.
Now i had JLabels where i gave them ImageIcons. Look at the following code.
ImageIcon BPawn;
ImageIcon WPawn;
JLabel Label = new JLabel[8][8] //2D array of labels that gives each spot a position.
public void setPieces(){
//set up pawns in their respective positions.
BPawn = new ImageIcon("Images/BPawn.png", "BPawn");
WPawn = new ImageIcon("Images/WPawn.png", "WPawn");
for(int i=0;i<Label[0].length;i++){
Label[1][i].setIcon(BPawn);
Label[6][i].setIcon(WPawn);
}//end for
}//end setPieces.
There is a lot more in setPieces() method, but this glimpse is how you would reference the images in your source folder when you create an executable jar and want the images to show up.