Maybe it's too big? I don't really know if it's showing up in the "layout" section of Blogger. Maybe search on Blogger help-I've gotten some answers that way before.

Erica, I've been blog-stalking and I found you!! My sister is really good at making blog backgrounds and headers, and so email her at andreamhamlin@hotmail.com and she'll help you out. She has a very part-time job, no kids, and so she loves to do stuff like that. She always changes mine for me and she seriously won't think it is weird to help you out. Good luck!

Hey this is Peggy's sister. She kind of explained your blog trouble to me, the header and how the cutest blog on the block wouldn't work. I think your header not working might have something to do with the search bar that's inside it, but I've never seen a search bar on a blog header so I have no idea. I'd try removing that and making sure you click shrink to fit when you upload your picture.
As for the cutest blog on the block not working I think I'd have to log in as you and mess around a little to see what I could come up with! Sorry I'm not as much help as Peggy thought I'd be! You can email me or leave a comment on my blog anytime if you don't think I'm crazy for commenting on here! I'd be happy to log in and see what I could come up with, but you'd probably want to temporarily change your password or something! Good luck!

Oh I forgot to add, sometimes resetting your blog to the plain minima template before adding a new background is necessary for the new one to work. Depending on how you add it, some of them won't override preexisting backgrounds.

Just to add, my internet is acting up right now and if you did get a background to work, I can't tell because it won't load it! So you probably didn't need anything I wrote about that. I'm sure you think I'm a crazy stalker now.