Hi dpeer [webmasterworld.com], and welcome to WebmasterWorld :)
The point is to make this simple for you ;)
Exactly how to do this will depend on your html structure. Plus when you said the form is appearing "above" the header image did you mean "above" as in "on top of" (so the form is closest to the viewer, and the image is "behind" the form)? If so that is expected behaviour as on the provided code the image is a background-image, which means it is painted early, and so "behind" other elements.
However, that depends on where in the html you have coded the form and the styles applied. But as you say, you need to adjust the widths of the header and child elements to create enough room for the form. Then apply either a display [w3.org] or floats [w3.org] to get the alignment you want.