I am looking for the code that renders the below page. Where can I find it, it does not appear to be in functions.php?
I want to learn how they allow users to upload images
Looking for the code in twentyten that allows users to select images for the header/banner
The code you are looking for is in functions.php (line 106 to 211).
To understand what they have done in TwentyTen, I would suggest that you read the following:
http://codex.wordpress.org/Function_Reference/add_custom_image_header