God is spirit, and as such he doesn't have a body (Lk 24:39: "A spirit does not have flesh and bone."). When the Bible speaks of our being made in his image, then, it doesn't mean we're like him physically. It means that, like God, we possess a spiritual aspect to our being. Like God, we can truly know, will, and love.
Part of the problem here is that many people who should know better succumb to an anthropomorphic view of God. They think of him as an old man with a long beard who sits on a throne in the sky.
However helpful such ideas maybe when not taken literally, they can be harmful when their anthropomorphic nature isn't understood. The Old Man in the Sky divinity is easily disproved and ridiculed. After the first Soviet cosmonauts returned to Earth, they thought their atheism was vindicated because they hadn't seen God in outer space.
It's a good thing they didn't see him there, for it would have disproved Christianity if they had. Christians believe God transcends the limitations of matter. He's not confined to a body at a particular place. (And he's not restricted to living on another planet as some science fiction writers have imagined.)
We should remember that our knowledge of God is metaphorical and analogical, not literal. When we assert something about God, we're saying he's both like and unlike what we're asserting. For example, we can say God lives, but we don't mean by this that he lives as biological creatures do--by nutrition and elimination, growth and development.
To take the Bible's language about God literally creates problems. The Bible does speak of the "arm of the Lord," but this can't be taken as proof that God has a body. If that were so, then we must suppose the Lord is the Supreme Chicken because the Bible also mentions the protection found in the shadow of God's wings (Ps 17:8).
In Scripture the arm is used poetically to express power or strength. The phrase "arm of the Lord," then, is a way of expressing God's power and might, not a anatomical aspect of the Supreme Being.