General Question on how to setup db's for a social networking site
There have been volumes upon volumes written on normalization. No one here can tell you how normalized your database should be without information. The best advice is to read and fully understand what normalization is and, once you have that understanding, you'll be able to apply it to your application and database design.

Storing images in database? All I can say is test test test. It's going to depend on the application, hardware, table-size, etc. Luckily, for something like that, it's easy enough to store both the image and path in the same table and you can easily QA each.

I say this with absolutely no malicious intent, but if you need to ask about database design at that high of a level, you may be much better off contracting an experienced DBA/Data Architect to do the design legwork once you have the application layer designed.