graphically challenged

I really hate to admit defeat...or partial defeat at least.  I am saying it outloud...I am graphically challenged when it comes to digital scrapbooking, etc.  I've been trying all day to create a new header.  I found a cute leader that matches the page pretty much.  I inserted my photo...okay I don't get the transparancy thing, but I added one anyway.  I added my text.  Next, it was saved as a JPEG and GIF formats, they looked clear.   I uploaded to my blog and.....the lettering is blurry...again.  What gives?!  Can someone please tell me what I'm doing wrong?