Trying to create an image loader but the image wont load. I know my code is right, any help please. comments are in place

Trying to create an image loader but the image wont load. I know my code is right, any help please. comments are in place

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01//EN"
"http://www.w3.org/TR/html4/strict.dtd">
<html>
<head>
<title>Image Loading</title>
<meta http-equiv="Content-Type" content="text/html; charset=utf-8">
<script src="/js/jquery-1.4.2.js" type="text/javascript"></script>
<style type="text/css">
body {
margin: 10px;
background: #ddd;
}
DIV#loader {
   border: 1px solid #ccc;
  width: 500px;
   height: 500px;
}

/** 
* While we're having the loading class set.
* Removig it, will remove the loading message
*/
DIV#loader.loading {
   background: url(images/spinner.gif) no-repeat center center;
}
</style>
<script type="text/javascript">
// when the DOM is ready
$(function () {
 var img = new Image();
 
 // wrap our new image in jQuery, then:
 $(img)
   // once the image has loaded, execute this code
   .load(function () {
     // set the image hidden by default    
     $(this).hide();
   
     // with the holding div #loader, apply:
     $('#loader')
       // remove the loading class (so no background spinner), 
       .removeClass('loading')
       // then insert our image
       .append(this);
   
     // fade our image in to create a nice effect
     $(this).fadeIn();
   })
   
   // if there was an error loading the image, react accordingly
   .error(function () {
     // notify the user that the image could not be loaded
   })
   
   // *finally*, set the src attribute of the new image to our image
   .attr('src', 'images/steep.jpg');
});
</script>
</head>
<body id="page">
<div id="loader" class="loading">
</div>
</body>
</html>