If the copy and replace dialogue isn't popping up, you're probably copying to the wrong folder.
If you're only copying one file, it won't have a Yes to All choice because there's just the one.
I don't know if you're on a PC or a Mac (though I'll assume PC) but to find the image folder for the game (if you got it from LDW or another place that doesn't package the folder out of reach) you go to your Computer folder, then probably to your C drive (on a PC) and then to Program Files > Virtual Families > Images.
There's a chance - if you didn't buy the game from LDW - that you may have to look for a folder by the name of where you bought it in your Program Files and THEN go to Virtual Families, but I'm not sure.