What is the optimal way to slice up this background image for optimal CSS implementation? The designer knows no CSS and since we’re not CSS experts, we’re not sure of the best way to slice up the background image. The background, of course, should be fluid and scale to different monitor sizes and page lengths. At the same time, it seems sub-optimal to have one large image or multiple small images.
We don’t need to support IE6.
Any advice?

By slicing, I’m not 100% sure what you want exactly. I assume you are looking for a way to stretch the Facebook part as much as needed, while still keeping the background image decent.
For most non-phone (ie desktop or tablet) screens, you could cut below the last cloud and have a repeat vertically of the blue sky background. With the CSS property background-repeat: http://www.w3schools.com/cssref/pr_background-repeat.asp
You’d have 3 divs with margin: 0:
the hmm panabee (actual content) div, background image is the balloons, centered. You expect its height to be greater than your image’s height. If you want to enforce it, there’s min-height. Bottom of this image should be blue sky.
the facebook div, can be as big as you want if you use the background-repeat with the blue sky image.
and the footer div, with a background image of your choice, but the top of the image should be blue sky.
I think all this (except min-height, maybe?) should work on most browsers, even IE6.