Yeah, the navigation isn't great and I personnally don't like thick borders. However, it's much better than my first design.
honestly, it's not that bad. you really need to work on building a proper "grid" and sticking to it. create equal spacing all around and be very consistent! i've "oranged" the widths and heights of some of your margins and they really are all over the place. make them all equal or ratios. otherwise it looks like a mess. the other thing is that for a template with image headers, you have to "set" the names in the template. it is better to keep them as html text and so your template sketch should reflect that. -r
Decent for a first attempt, but lacking in certain aspects. For example, I have no idea what the navigation background is supposed to be.
looks nice, is this a fluid template design? so it wont stretch when it opens in a bigger resolution.
Also, for your corners I see you used the Select -> Smooth and it aliased the image really badly. Instead try using the Circle marquee, drawing a circle (so the top/left corner is as big as you want the curve) and then using the vertical and horizontal marquee tools stretch that image out. Then duplicated it and flip it around to make your rounded corners. This will give you a much cleaner curve than the smooth function. Everything else has already been stated previously.
Why? If you're talking about the diffusing taking place, that happens on large images with gradients, that's standard across all LCD monitors and some CRT's; not a browser problem. The only browser/filetypes that have problems displaying are PNG's in IE. IE6 doesn't render the Alpha-Transparency, IE7 renders transparency, but in doing so they made a foo-pa in the Gamma layer which makes PNG's slightly darker in IE7.
After taking another look, I would also suggest doing something with those images. A good generic template will be GENERIC but not BORING. these images show "business" very well, but the actual template itself has something more fun and more "web 2.0" in it. just doesn't mesh well to my eyes.