Well I don't only want to help you guys out with working with Photoshop. I figured why not help you with the new Blogger set up too. So anyway, this will be short and sweet and easier than you expect.
How to add Blogger header
Go to your main blog page. Go up to the top right where it says "design".
Now you should see this. Go to Layout.
Once you click layout, you should see this now. Go to the header section where it says Edit
This arrow should say Add image on your blog right now, upload your header pic.
Make sure that you check "Instead of title & description"
and voila! that's it. The size for the header on the Simple blogger template is 920x435.
Now for the background:
Again, go to Design
Next, go to Customize:
You should now see this. Now go to Background.
Click on Remove image and upload the image of your choice. It's best that you use a tiled image so that you have no discrepancies on your blog.
and that's it. Hope this helps you guys.