To customize your blog here's the easiest way I've found. These instructions (along with other templates) are from matiekay.blogspot.com. Just follow these instructions for a 3 column blog. It's really fast and easy. Then after you've done this when you view your layout in the html you can find the 4 url picture links (background, post background, and 2 header backgrounds) and change them to whatever you want. (I upload what I want to photobucket and use the Direct link) The best website for paper/embellishments for me is shabbyprincess.com and they have a bunch of kits to download for free.
*Remember you can change the font colors to your liking by clicking template then click the tab font and colors.
* Also I added a bunch of page elements hoping to cover every ones wide range of sidebar elements. You might notice when you sign in blogger and click on dashboard that there is a lot of elements. You can edit or delete those if you want (at least the ones you aren't using:) Sorry for the inconvenience it may cause some of you but hopefully it will help. One more thing it will most likely rearrange the way you had your elements so just rearrange them and you'll be good to go.
STEP BY STEP INSTRUCTIONS TO APPLY LAYOUT:
Log into your blogger account and go to your dashboard.
Click on Layout in the right hand corner of the blog which you want to apply the template.
Go to Pick New Template
Click Save Template
Go to Edit HTML
Delete all of the HTML
Go to: http://docs.google.com/Doc?id=dk8xhn3_62d7qrkq
Copy all of the HTML (don't copy the small blue text at the bottom under the line)
Paste the HTML
Click Save Template
To do the custom header it gets a little more complicated but not much. I just use Roxio (a photo editing software) but you can also use Adobephotoshop. I create a "picture" using all of the papers, photos, embellishments and then add that picture to the top of my blog, not as a header but as a picture.