Click the image above, or from Flickr, to view the larger image, which is smaller than the actual size of 1024 px wide. The large image doesn't fill the whole screen but the actual template does.
The sample template in the image above uses an image as its header. If you want to use your own image for the header, the image width has to be 892 pixels (with any height) to fit the header nicely. This template can be completely changed from the Fonts and Colors tab in the Layout panel.
See these links for more help on using this Blogger template: