Is there a reason the Logo is separate from the Banner? I have a banner all made up that has the logo and the site name all together in one image. Should I separate the logo from the site name and post them apart?

Also, can I post an ad in the banner area alongside the site name? or is that the reason for the separate banner - for the ad alone?

The reason for the banner and logo being separate is it give you more configuration options. You can certainly have one image that has both but you lose the ability to move the logo around for instance but you can just create a new image. For putting an add along side the site name I would use a new widget area with perhaps two cells in the header and put the logo in one area and the ad in the other. You can read about widget areas in ATO>Add New Widget Areas

Can I make the entire Header Banner a New Widget area for ad? My Logo/SiteName image fits pretty nicely in the Logo Area, so I don't need to use the Header Banner for anything except maybe to put an ad there.

Thanks for the clarification.

Here's what happened. I put the Atahualpa suggested codes in the Layout Container, and the Header Image as well as the RSS/Comments icons shot completely out of frame. So I ended up deleting the Logo codes, and now my Header Banner is perfectly in place, occupying the entire header section.

I actually don't mind just having one image in the Header because my site name is pretty much part of the logo. Right now, it looks fine and it works for me without the two separate areas (Logo/Banner). But I hope there is no harm in deleting the Logo codes.

As for the RSS/Comments icons, for some reason, when I deleted the logo codes, the RSS icons disappeared also. But again, it actually works for me that the RSS icons are not on the Pages Menu Bar. I prefer to put the RSS & Twitter icons on a widget below.

i don't know why the RSS icons disappeared. As far as I know, the RSS codes are still there. I didn't delete them. But, if there's no harm in ignoring the disappearance, I'm fine with the way things look now.

Ok, I see. Search/RSS/Comment is part of the logo area. But I tried to restore the logo area, and the search/RSS icons are still out of frame. If I take out the logo area, can I put the search box on the Menu bar manually?

Also, The logo area used to be right next to the Header Banner. Now that I restored the logo area, the logo sits on top of the banner. Is that the reason the Search/RSS icons are outside of the Layout Container?

You can put the RSS and Search in a sidebar widget or create a new widget area. As for the other items could you please supply a URL?