Create a folder 'data' directly inside src

Put your photo.jpg inside that data folder.

Select 'refresh' from the File menu in eclipse to ensure Eclipse knows about your newly created folder and file.

Processing should now find the file. This data folder is exactly equivalent to the data folder you might create inside a normal Processing PDE project.

(Behind the scenes, every time you run your project from eclipse, it actually places a copy of all the compiled classes and your data folder and its contents to the 'bin' folder in your project, but you don't need to worry about that if you keep everything in src. What you should definitely NOT do is store your data files in bin directly because Eclipse will periodically clear this folder out).