Quick Question

You need to edit your style.css file located at:

/wp-content/themes/default/style.css

What you have is this:

#header {
background-color: #73a0c5;
margin: 0 0 0 1px;
padding: 0;
height: 200px;
width: 758px;
}
#headerimg {
margin: 0;
height: 200px;
width: 100%;
}

Problem is, I think your image is 150px for height. Either adjust the height of the image to fit the header or change the header code and headerimg to be 150px in height. The header background color must be that blue as well.

Hope that helps.

Trent