Well, I got the picture to look better. I unclicked Blend and clicked Real for the image. I could use some advise on how to produce the proper shadows around the object to make it look like it is sitting on the ground in the picture.
Nismo made a tut that could help. Basically, the tut tells you how to show only the shadows on an object so you can see the background. This way you could create the illusion that it is casting a shadow in the background image itself.