I use Photoshop Elements to design my blogger backgrounds. Open a new file measuring 2000 x 1100 with a white background.
Then bring in another layer that will measure between the 8 inch and 20 inch mark on your ruler. This seems to be about the best, but you can fiddle with the size and see what you like.
The final step is to decorate with graphics to your hearts content. You will need to upload your photo to a place like http://www.photobucket.com/ and copy the direct link code. You will need this code for the final step.
I hope this all made sense! Enjoy your new blog background! Don't forget you can also make a Pretty Header for your blog too! 650 x 322 pixels if you want to know the measurements!