OK, here ya go - Let me know how this works for you...
Thumb ↓ - Do not save! 
To save at full 480x800 resolution - Follow the link bellow and long       press the image on your phone    until the save option pops up, Then       find it in your photo gallery and   set as wallpaper.  If it looks       fuzzy, you may be better off viewing it   from a computer, right  click      and "save  as", and finally transferring  to  you phone via  USB or      email.
 
 Link to full sized version ↓
new_sofa_re-do-480x960.jpg
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As for how I did this... I started out by opening this handy-dandy 
480x800_wallpaper_template.png,  the same resolution of your phone's screen.  Next, I opened the pic you  posted and re-sized it (maintaining the aspect ratio to avoid unwanted  stretching in one direction or the other) until the sofa would fit  entirely on the template, then pasted that as a new layer over the  template.  Now this left the image too short to fill the whole 800 pix  height, so I lowered the new pasted layer to the bottom, leaving all the  space to be filled at the top.  To do that, I just copied part of the  wallpaper background, pasted as a new layer and moved it up to fill the  empty space making sure to carefully  match the patten.  This last step I  repeated until the top space was filled. Then just save as a .png or  .jpg and you're done!  Good luck!
If I was unclear (highly likely! 

), or you have any other questions ask away, and I'll do my best to answer.