Depending on the attachType argument, the index value refers either to the index of an arrow segment, or to the index of a control point.

If your arrows have only one segment, you can calculate its center like this:

PointCollection pts = arrow.ControlPoints;
PointF center = new PointF((pts[0].X + pts[1].X) / 2, (pts[0].Y + pts[1].Y) / 2);

Then create a box at the centerPoint location so the image center point coincides with the arrow center:

Box imgBox = fc.CreateBox(center.X - imgSize / 2, center.Y - imgSize / 2, imgSize, imgSize);
imgBox.Image = ...;
imgBox.Transparent = true;

Finally attach to the only arrow segment:

imgBox.AttachTo(arrow, AttachToArrow.Segment, 0);

I hope that helps,
Stoyan