Old post below:
I was just asked about my banners and how I make them.
I use GIMP (GNU Image Manipulation Program) which is an open source program for digital manipulation. The most comparable program is Adobe Photoshop which can set you back about $700. Now, that's a lot of money, but it really is a fabulous program. However, I wouldn't recommend shelling out that kind of dough unless you REALLY REALLY need it! The program was designed for professionals, and it's a lot more powerful than what 99.99% of people would ever need. GIMP is free and a really great program. It's more powerful than what 99.95% of people would ever need.
For making a banner, GIMP is a bit overkill if all you want to do is put some text over a picture, but I like recommending the program for a few reasons. Most revolve around its capacity to alter images for reasons other than blogger banners, and it's a good program to know about such as when your boss wants you to make a flyer or whatever. If you know how to use GIMP, it's a marketable skill. You won't be a graphic designer, but you will be able to resize an image and alter the color levels without making the whole picture look like gobbily-gook.
Please check out the tutorials offered on the GIMP website. When I first started using Photoshop/GIMP, the hardest thing for me to wrap my head around was layers. How I came to think of layers was like clear plastic sheets. You can stack as many sheets as you want, and you can move the sheets in whatever order you want to give you a new image. I'm not sure why that was the hardest part, but it was. After I'd learned the basics, it all became much easier because if there was something I wanted to do and didn't know how to do it, I could google for a tutorial. Slowly it became easier and easier as I learned more of the tools. The more tools you know, the more you can do.
Another thing that really helped was participating in Photoshop/GIMP contests and joining forums. Worth1000 is probably the most reputable and well-respected, but there are loads. You can go there, get inspired, learn tricks, and try to figure out the process that someone else used in making an image. Very cool stuff. There's also DeviantArt, but there's a lot of hit-or-miss.
Ok, so I haven't told you how to make a banner.
Here are the steps I used to make my Spring chalk-on-sidewalk banner:
1. Open image file.
2. Right click on image and go to Colors -> Color Levels.
3. Changed alpha levels to correct for poor lighting.
4. Select "Rectangle Select Tool".
5. Select the part of the image that I wanted to be the banner.
6. Right click on image and go to Image -> Crop to Selection.
7. Right click on image and go to Image -> Scale Image.
8. Change width to 650 pixels and hit Scale.
9. Right click on image and go to File -> Save As.
10. Find appropriate file, create a name for the file, select JPG or write ".jpg" at the end of the file name (or GIF or PNG or whatever), and click Save As.
11. Change quality between 85% and 97%.
12. Click Save.
Done! Now that was easy because all the words were already in the image, and I didn't have to add any text or layers or really anything. I also didn't care about the height (well, to a point...), so keeping a ratio wasn't a big deal. If you can get everything you need into a single photograph and keep out things you don't want in the photograph, then the easier the finishing process will be.
I'm leaving out so much information, but I encourage everyone to get familiar with GIMP or Photoshop. It's useful stuff!