Okay, let's start by setting up our site first. This is what ALPHA is talking about.
Start up Dreamweaver and go to Site > New Site. Alright, now it will bring up a pretty straight forward window. Type in the name of your website and hit next. Select, No, I do not want to use server technology unless you are going to create flashy PHP, ASP, JSP pages. Hit next. Select Edit local copies on my machine, then upload to server when ready (recommended). Okay, underneath the three option is a box that says Where on your computer do you want to store your files?. This option defines were your website's files will be kept. Select the folder in which you wish to store your files and hit next. You'll get an option asking How do you connect to your remote server? From the dropdown menu select None then hit next. Hit Done and you have set up the root directory of your website.
Now, it's onto the designing stage. Design your website and save the pages (the .htm files) into your root directory. Remember that everything involving your website, from images to HTML files must be stored in the folder you specified. Once you have fully designed your website and everything is working on your local machine (your computer) you must upload it to your webhost's server.
Upload all the files within the root directory to your webhost and everything should be sweet.
Note: If you create another folder within the root directory, you must create the same folder on your webhost's server. Example - the folder your specified is C:\My Website and you create a folder named Images inside the folder (so it'd be C:\My Website\Images), you must create a folder called Images on your Freewebs account. And any files you had inside that Images folder must also be placed inside the Images folder on your Freewebs account.
I hope you understand all that. I tried to write it at a n00b level, but it's hard to explain stuff like this at that level.
Oh, and those X's you are getting are most likely from you not correctly linking to your images.