jQuery replace image with upload

<div class="preview"><img src="img/logo.png" class="original"></div>
<div id="button1">Upload</div><span id="status"></span>
<ul id="files"></ul>

<script src="js/ajaxupload.js" type="text/javascript"></script>
    <script src="js/jquery.myimgscale-0.2.min.js" type="text/javascript"></script>
    <script src="js/jquery.myimgscale-0.2.js" type="text/javascript"></script>
    <script>
    var button = $('#button1');
    var status = $('#status');

        new AjaxUpload(button, {
            action: 'upload-handler.php',
            name: 'userfile',
            onSubmit : function(file, ext){
                if (! (ext && /^(jpg|png|jpeg|gif)$/.test(ext))){
                  // check for valid file extension
                status.text('Only JPG, PNG or GIF files are allowed');
                return false;
                }
                // change button text, when user selects file
                button.text('Uploading');

                // If you want to allow uploading only 1 file at time,
                // you can disable upload button
                this.disable();
            },
            onComplete: function(file, response){
                button.text('Done');

                // enable upload button
                this.disable();

                //On completion clear the status
                    status.text('');
                //Add uploaded file to list
                    if(response==="success"){
                    $('<li></li>').appendTo('#files').html('<img src="./uploads/'+file+'" alt="" class="newImg" /><br />'+file).addClass('success');
                    } else{
                    $('<li></li>').appendTo('#files').text(file).addClass('error');
                    }
                    $('img.original').replaceWith( $('img.newImg'));
                    $('img.newImg').scaleImage({scale: 'fit'});
                }
        });
</script>