First, I would take it into Fireworks and optimize the image so it's as small as possible in relation to bandwidth, without losing too much of the images integrity. After that, I would crop it so that it vertically extends down around 600 - 800 px from the top, and then create a gradient overlay so that it fades into a web color toward the bottom of the background image. Then change the pages background color to match the bottom of your image.
It's a cool effect and will keep your load time down.