OK. Let's walk through creating a very VERY simple banner/header for your new blog. I'll use Phtoshop 7 for this, since that's convenient for me. You can use any version of Photoshop, Photoshop Elements, Paint Shop Pro, or similar software.
1. Start up PS and create a new file. File -> New
2. Set a size for the new file. Let's make it Width: 600 pixels, Height: 200 pixels. The actual banner size you need will depend on whether you are going with a 2 or 3 column layout. We'll make this banner smaller than what you will need, and let the background color on the blog balance out the rest.
3. Leaving that new blank file open and visible; open up an image you want to add to your banner. Resize the image so that it is 180 pixels or less in height - that way it will fit on the banner with some room to spare. At this point, I'll hit File -> Save As and create a copy of the image just in case I muck it up.
4. Click the MOVE tool. Click on the image. Drag the image into the blank file. Position it to the left in the blank file.
5. Now let's add some text. Click the TYPE tool. (Some programs will call it the TEXT tool) Select a font size, size and color. Type in your text.
6. I think the parrot image could use a hairline border, but I'll save that for another post.
7. Save the finished banner as a JPEG image. Now you are ready to up load it.
9. One tip: In the Page Banner wizard, be sure to select WHITE (click on the color box) as your Banner's background color, to blend with the background of the banner you just built.