the element next to the file field is a hidden element, meaning that you wont see it in the browser widow. hidden elements cannot be seen on the page.
the way the update works is this:
the hidden element should contain the name off the file stored in the database.
in the update behavior, you have the ProductImage column bound to the Digital File pro Server File name variable.
If no image is uploaded, the server file name variable uses the Default File value (The value originally stored in the ProductImage column)
if a new image is uploaded, the server file variable is set to the name of the newly uploaded image.