Instead of using hypershade try selcting the plane holding the "space" bar to bring up the main marking menu then click Materials and Shading > Assign new material> Labert. Then click the checker box next to colour in the material attributes box and click "file", browse for the image. EDIT: -- MAKE SURE YOUR IN SHADING MODE "6", TO DISPLAY TEXTURES. PRESS 6 ON NUMBER PAD.