It's not a bad design. A couple of notes, though.
It feels a bit...claustrophobic. I would maybe widen the content area a bit, and leave some more white space.
Try to steer clear of using images in place of text, especially for navigation. You should be able to find a webfont that is at least similar. Try
http://www.fontsquirrel.com
It's best to keep styles in the stylesheet as much as possible. By this I mean the image width, height and border. Also, if you're not actually resizing the images, there's no need to add width/height values.
I really like the color pallet and layout of this site.