We recently had a customer ask to replace the header text in the WordPress Twentyeleven theme with a logo.

This thread on the WordPress website gives a very good explanation:

http://wordpress.org/support/topic/twenty-eleven-theme-modification?replies=5

The only tweak we made was to keep the Site Description text visible.

h2#site-description {
text-indent: -18px;
}

h1#site-title {
text-indent: -99999px;
}

You can see the finished site at www.lifeworld.info