you do not make it disappear, you just dont draw it anymore.
in your case make a boolean variable.

lets call it boolean showimage = true;

now draw the image
if(showimage)image(img,0,0,w,h);

and then, on mouse press
do something like this :

if(mousePressed)showimage = false;

forgot to say its a jpeg. don't seem to be getting the desired effect.

Well, in draw you'll have to put something like

Of course, your draw() must start with a background() call.