need help with illustrator

Making sure the image is below and the outline is above and one path or a compund path, select both and go to Object>Clipping Path>Make

Gail,

"how can i create an outline of an image"

If that image is vector artwork, you can unite or something to have just the outline path, then use that as the Clipping Path forming a clipping set with the underlying image.

If that image is a raster image, you will need to trace its outer bounds manually, or with Live Trace and expand and then unite or something to have just the outline path, then use that as the Clipping Path forming a clipping set with the underlying image.

Or you can make the whole raster image fully black or white in Pkotoshop and then create an Opacity Mask with Clip ticked and Invert Mask ticked (if black) or unticked (if white).

Assign the outline as a clipping path to the other image via the respective commands after you selected both.

Mylenium