Including images in LaTeX requires that the files be in Postscript or encapsulated Postscript formats. There are several means of including these images, using various commands, including \epsf, \special, and others which have varying utility. In using LaTeX2E it is recommended that you switch to using the \graphicx package.
To use the package, include a \usepackage{graphicx} command, for example:
\documentclass[oneside,12pt]{book}
\usepackage{graphicx,amssymb,amsfonts,amsbsy,amsmath,amsthm}
For example, to include the encapusulated Postscript figure in
a figure environment, do
\setlength{\unitlength}{1cm}
\begin{figure}[ht]
\centering
\includegraphics[scale=0.9]{./shape.eps}
\put(-12.7,-0.3){\makebox(0,0){\small $\ldots x_{j-2}$}}
\put(-9.7,-0.3){\makebox(0,0){\small $x_{j-1}$}}
\put(-6.9,-0.3){\makebox(0,0){\small $x_{j}$}}
\put(-3.9,-0.3){\makebox(0,0){\small $x_{j+1}$}}
\put(-0.9,-0.3){\makebox(0,0){\small $x_{j+2}$ \ldots}}
\put(-9.7,3.40){\makebox(0,0){\small $\phi_{j-1}$}}
\put(-6.9,3.40){\makebox(0,0){\small $\phi_{j}$}}
\put(-3.9,3.40){\makebox(0,0){\small $\phi_{j+1}$}}
\vspace*{7pt}
\caption{Piecewise linear shape functions $\phi_j, j= 1, 2, \ldots, n-1$
on the interval $[a,b]$. On each element
$I_j = [x_j-1, x_j], j = 1, 2, \ldots n$ the approximation is the linear
sum of two overlapping shape functions.}
\end{figure}
The \includegraphics command has several attributes (showing scaling) which can be used to specify the location, scale, size or rotaton of the figure.
A working sample illustrating the application of the graphics package is available online as part of the Dissertation package.