thanks falott, it still sort of confuses me. I guess what confuesses me is why does the image tile if you specify the range to be 2-2 say for instance. Anywho, I found a tutorial, that simplifies the scalling a lot easier. The trick is after you unwrap your uv's correctly, all you have to do is to select all of the uv's and then goto polygon->Layout UVs->[].
In the option box you set the settings to

seperate "off"
flip reversed "unchecked"
rotate for best fit "unchecked"
layout "into square"
scale "Uniform"
Map Size Presets "1024"

... and then click on Layout UVs


Also for the rest of you I need your opinion with my updates. I was thinking of appling fur. Though I found out that it might not be possible to bake the fur to a lambert
shader. Though a trick I was told is I could try appling fur to a plane, then render it having the camera facing straight toward the plane that has the fur on it and then save it out to jpg that way. Though here is my results and would like to see your opinions on this. Meaning should I jest go with the flat coloring method that have applied in the above examples, or does the reneder fur look ok. Just rember that this is going to be in shockwave so thats why I have been doing it this way.

here is a rendered image, and I will also post a non render afterwards.