Right, put the div's height and width back, and just prevent the image repeating like so:
#topBanner { background: url(images/topbanner.jpg) no-repeat; width: 970px; height: 109px; }
Then make sure the image is uploaded in lib/skins/your skin/images/
Then make sure in your header that the stylesheet you are linking to is lib/skins/your skin/styles.css rather than lib/skins/crystal/styles.css (I suspect this is the problem).
Finally, try Ctrl+F5 to refresh..