1. You have this in style.css line 153

.coltwo {
min-width:200px;
width:20%;
}

Change the value to 100%

2. In your case it is /wp-content/themes/atahualpa/images/header/, a directory on your web hosting account

3. After you made the change of 1) this should not be necessary anymore but you can edit style.css and delete the red parts

.post img.size-full {
/*max-width: 100% auto;*/
max-width: 96%; /* resize images in the main column if needed.
97% so images with padding and border don't touch
the right sidebar while being resized. Change this
to 100% if you want, if your images
don't have padding and a border */
width: auto 100%;
margin: 5px 0 5px 0;
/*overflow-x: auto;*/
/* more ... */
}



/* hiding from IE6 which would stretch the image vertically.
IE6 will get width and height via jQuery */
div[class~=post] img {
height: auto; /* FF & Safari need auto */
}


4.)

Edit the post with the Flash and add the green part:

<object style="margin-left:auto; margin-right: auto" width="425" height="344" codebase="http://download.macromedia.com/pub/shockwave


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To add or edit CSS, add your CSS at Theme Options -> HTML/CSS Inserts -> CSS Inserts, instead of manually editing style.css. That way your changes will be preserved when you upgrade to a newer Atahualpa version.