From my understanding, When you bind an Image in XAML, it must be of type BitmapImage. So you can change the type of Image in your MyItemType class to BitmapImage instead of byte[]. You don't have to convert it into byte.
In short, this is what you have to do.
public class MyItemType
{
public BitmapImage Image { get; set; }
public string Title { get; set; }
}
And remove the conversions and simple do this :
newItem.Image = b;
It should work now.
By the way, you don't have to explicitly write the DataType in the DataTemplate as it will understood by the WPF Engine. So you can specify the key for the DataTemplate and assign the ItemTemplate to your ListBox.
Hope it helped!