When I click a forum icon to change from on.png to off.png they dont change this happened after the upgrade...
It's nothing to do with the upgrade, you've got jQuery included in your pages, and it's conflicting with the MyBB javascript.
Well i havent had this problem in 1.6 and once and only once I upgraded to 1.6.1 this happened so...
Well, believe me, jQuery was not added in 1.6.1, and if you've got jQuery in your pages, it will conflict with the MyBB javascript, it always does. If you don't want to listen to what I'm saying then fine, but that is what is causing it, jQuery.
Does it add jQuery to the theme...?? if not, then no.
As far as I know, this plugin doesn't add any JQuery, however add a javascript in header include template, if I'm correct.
Did you use the changed files pack or upload the entire 1.6.1 package? If you've used the entire package you'll need to change .gif to .png again in ./jscripts/general.js
Oh, you'd edited code... yes, if you've edited code, you'd need to make the same edits again after you upgrade if the files have been updated, otherwise things won't work as you expect.
Never edited the code there only themes code...