If you are using the new blogger beta, you have to switch to "classic templates" in the new blogger since those were designed for old blogger.
Do note that from experience, make sure you get the url to the header.jpg and footer.jpg correct the first time round using photobucket.com, otherwise you will have difficulty to trace the link of urls the second time and may need to pay I guess. In my opinion, PhotoBucket.com is a little slower compared to Flicker.com by Yahoo!