Header is the one where the blog title is displayed along with the description.
First create an image which is around 760 pixels wide.
To have the image as the header, follow the following instructions.
First, login to your blogger account.
Then go to the layout of the blog .There click the edit on the page element which shows the title of your blog.
Then, in the resulting page, just browse and select the image you would want as the header. You can also upload it to any web host and give the link in the next text box.
You can either have the image as the back ground of the title and description or you can replace the title and description with the image. However the former is highly recommended. Then you might want to check the shrink to fit check box.
Then click save and it is all done.