theres one major difference. You were using the <link....> tag which is to link to an external css sheet, ie if you cut all of that css and saved it into a seperate css doc... i do it that way, its just easier and cleaner... but for that code to work you needed to use internal css, which means you use the <style> tag, not the <link> tag
by the way, you need to move this .html file back to the original directory, it needs a bg pic to display, and it cant display it if the file has been moved...