I think the background works pretty nicely. I'd say the text'd be best right-aligned, but that's on 1024x768, at 800x600 (slightly more common still), it might look better different.
Freewebs is appauling, and has a max downstream rate of less than 10KiB/s. If you post stuff like that, nobody who has a clue, on broadband, will bother.
That background is actually pretty nice, if 56k-murderous. Make sure you get a shot at the highest resolution possible, for the people who have high desktop resolutions, though. Some of the text's a little difficult to read, too.
Depends on the graphics card rendering it in the end. I mean, Voodoo 3's don't support textures larger than 128x128, if my memory serves me correctly. I guess they use a MIPed version the whole time ? or maybe it just doesn'a work.
I think it's the area of the image that matters more than the width or height alone; for example, I think you could get away with 512x64. No promises, though.