If you use saveXML() it does.  If you use saveHTML(), it doesn't because that is how it is supposed to be in HTML.  If you want XHTML, use saveXML()

Thank you for this bug report. To properly diagnose the problem, we
need a short but complete example script to be able to reproduce
this bug ourselves. 

A proper reproducing script starts with <?php and ends with ?>,
is max. 10-20 lines long and does not require any external 
resources such as databases, etc. If the script requires a 
database to demonstrate the issue, please make sure it creates 
all necessary tables, stored procedures etc.

Please avoid embedding huge scripts into the report.

If I make a complete script out of your snippet like

***

<?php
$dom = new domdocument();
$dom->loadXML("<foo/>");
$ParentElement = $dom->documentElement;

$imgPic = new DOMElement("img");
$ParentElement->appendChild($imgPic);
$imgPic->setAttribute("src","./1.jpg");

print $dom->saveXML();


***

I get 
<?xml version="1.0"?>
<foo><img src="./1.jpg"/></foo>
which looks perfectly fine to me. So please send a complete, 
reproducable script.


And: You should use domdocument->createElement() and not new 
domelement (but doesn't seem to be the root of the problem)

Thank you for taking the time to write to us, but this is not
a bug. Please double-check the documentation available at
http://www.php.net/manual/ and the instructions on how to report
a bug at http://bugs.php.net/how-to-report.php

as Rasmus indicated use saveXML to get closing tag because there is none 
in HTML.