Convert.FromBase64String only works when you have base64 string data. So, if you want to test it, you can always convert an image to base64 (add a picture control to a form, attach an image, open the XML with notepad, copy the base64 in the image field and paste it into a db field, for example, then report on it).
Like I said, we don't use database bound forms generally (but it sounds like your form isn't db bound? just that you are using VS to create the schema?) -- we use our web services to submit to SQL, which allows me to design forms with a field for an image file, then using our mapping tools, save the field value to an nvarchar(max) column. If you are going the custom code route, you could write some code the submitted your image fields as strings to your DB, just as they are in the form. As you mention, you could also try modifying the schema to base64Binary instead -- just create a template from scratch and look at the schema file after you've added a picture control for the syntax.