Welcome aboard tessa,
Should I use image links (which I have already started using) or text links to internal pages from my index page.
"It depends." :-) Search engines will always like text links better, but if you use the alt and title attributes in images, it's okay. The down side is this adds to page weight when you don't need to. Use images for links only as a last resort, that is, if you absolutely must have a certain font and you're not sure it will render across all systems correctly, or the link is of a graphic nature.
Although not directly related to your problem, using CSS as background images is also helpful if you simply must use images for links. You set the display of the a as block so you can access width and height as needed, and assign background images accordingly.
.nav { display:block; height:20px; }
.nav:link { background:url(images/nav-link.gif) top left repeat-x; }
.nav:visited { background:url(images/nav-visited.gif) top left repeat-x; }
.nav:active { background:url(images/nav-active.gif) top left repeat-x; }
.nav:hover { background:url(images/nav-hover.gif) top left repeat-x; }
<a class="nav">some-nav</a>
Alternatively (and better, actually,) put all the images in a single image so they load at once, and adjust the background position (topic for another thread.)
I am using dreamweaver and couldn't get rid of the underling link and so decided to use image links but not sure if this will damage the internal ranking of all the other pages.
And you're probably finding you have trouble getting rid of the blue outline on the image links. :-)
<a class="no-line">link</a>
then in style sheets,
.no-line { text-decoration:none; }
images and image links:
img { border:none; outline: none; }
Although outline:none can be applied to text links to get rid of the dotted outline too, it's not a good idea for accessibility reasons.
As for the other pages, no, a link is a link, but, see the above.
I am a self taught web site builder and afraid my site is full of problems but has grown too big to change to easily.
It's never too late. :-) In case you haven't been there,
W3C Schools [w3schools.com] has some good "Cliff Notes" on CSS. WebmasterWorld is the resource for specific problems.