Elona item graphics are stored in the item.bmp file in the Elona/Graphics folder, and editing that file can obviously replace graphics for an item. Unfortunately, there is no easy way to replace item graphics in the original, but a guide to do so is located at the Item appearance editing with Elosnack page.
However, later versions of Elona+ add the ability to change item appearance individually, and as a type.
Sprite replacements in Elona+[]
To replace every item of a type, create a 48x48 pixel image for 1-tile items, or 48x96 image for 2-tiled items. The changed graphic will not be larger than the tile size of the original items no matter what the size of your bitmap file, and will show the image starting from the top-right if the image is bigger or smaller than the tile.
Then save the picture as a bitmap and name it item_#.bmp, where # is the number of the sprite being replaced. Specific item numbers can be found in the Item table page, where they are listed under the "Sprite ID" column.
Place it in the elona+/user/graphics folder. The background color of the item is usually safest as pure black (RGB 0,0,0), and as a 24-bit bitmap, but is more flexible than customizing the game's required graphics sheets. If the item does not appear as you intended, restarting the game after editing the image will easily fix it.
Individual item replacements in Elona+[]
To replace a particular item's appearance, bring the item in question to <Garokk> the legendary smith and use his Item appearance customization. More details on doing so are on the linked page.
It is important to note that all 15 of the item description text files and the first two of the bitmap files are located in new versions of the game, and are not created the first time the game is run after checking if they exist. This means that if you extract the zip file containing a new version over your old version, the files containing your custom items will likely be written over. So in this case, it is important to back up both the text file and graphics file of your custom item. The game reads the item information when it is started, and will always read the information of the item number that you specified. So if your information is overwritten, it can easily be replaced from the backup then restarted without the need to revisit Garokk to customize your item again.
Possible issues[]
When exporting from GIMP to .bmp format you must check the "Compatibility Options -> Do not write color space information" box. If you do not, the program will crash on startup (Version 1.40fix2).