Prob not a good idea to post client URLs.

You are going to use different html mark-up for the image and the h1.

They are not equivalent.

If you use the image you can add alt text but that is not going to be the same as H1 - less effective in my opinion.

If you can't get H1 into your site any other way then loss of the H1 will be part of the cost of your redesign.

If this was my site I would not give up H1 for an artsy image.

There must be 100 links commented out in your code... Here is an example...

<a href="[http://www.oxfordmshomes.net/condos/a-southern-place-Oxford-MS](view-source:http://www.oxfordmshomes.net/condos/a-southern-place-Oxford-MS)" class="main">
<span>A SOUTHERN PLACEspan>a>li>

The short answer...  I don't know for sure.

Clarified answer...  At the present time I do not believe that there is a huge difference in how Google and other search engines treats H1, H2 and H3.  However, just to have things straight... I would make that

Acadia Court an H1.  You can change the appearance using css.

You didn't ask but when I looked at the code of your page I was shocked to see so many link tags commented out.  I would be getting rid of those if this was my site.

I would not use 1x1 pixels to give links or anchor text.  That could get you in trouble with search engines for trying to hide something.

I honestly doubt that this is helping your competitor and is certainly more risky than helpful.

Just stay the course on improving your site.  You will beat them when Google thinks you deserve it... or when Google drops them for trying to hide links.

In my opinion, any answers given without knowledge of sales and profit data are dangerous.

Also, relative strength of the sites and their competitive markets should be considered.

If either of these are important sites that support a business someone who really knows what tehy are doing should be studying the options - which are greater in number than 3 or 4.

Wikipedia can be really really really hard to beat.... did I say really really really really hard to beat?

Just keep working on your site like wikipedia was any other competitor. Build great content that gets liked and tweeted.. .stuff that engages your visitors.

There is no special bullet for killing wikipedia.  You simply must overpower them by brute force of a great website.

Good luck.

What do your visitors think of these gadgets?  Do they use them or are they warts that distract from your website?

From a content perspective you should use gadgets only when they are a positive contribution to your site that is just as interesting or more interesting as the rest of the content on your page.

From a technical perspective I've seen some sites have so many warts that their pages take forever to load.

From a social perspective the gadgets should help people communicate about your content rather than be simply a doorway out of your site to a weather site, a social site or some other destination.

So... think about these gadgets.  Do you your visitors need them?  If not then don't use them.

Is the email content bragging about your inventory or your blog?

If inventory then link to it.... if blog then link to it.... if both then link to both.

Just so you know... google does not care about links in email messages and I doubt that they will be counting the traffic from that source. 

Should I Just Copy A Competitor's Backlinks?

With most competitors this is not possible because:  1) they control the sources of those links, or, 2) those links were awarded on the basis of merit and you probably don't merit.

You rarely win by mimicking a competitor.  You win by doing something superior.

I can understand why shorteners are handy for twitter where the number of characters available is very limited.

Beyond that I don't use these shorteners.  Why redirect anything unnecessarily.  It risks a drop in anchor text value and linkvalue.  Also, some people hesitate to click shortened URLs because they could be hiding a nasty destination.

I am not using them.. no way.