Now:
- You don't use the image variables (which are now called 'smiley1' and 'smiley3') at all.
- You use 'image1' to decide which image to set. It is set to false initially, and is never changed to true, so the same image ("smiley3") will always be set. (Think about when it should be changed to true, and when it should be changed back to false).
- There is still no delay in the loop, so even if it did alternate images you would not be able to see this happening.