i didnt do anything special, just had it on auto setting since im still learning to use it and screwed around in photoshop with them a bit

auto setting = bad
If you want the back ground "blured" or out of focus use the Apt mode and shoot at different f stops the lower the number the less depth of field you'll
have. Your shooting digital so play with the settings, it doesn't cost you anything. Better yet use your d50 in manual mode for a while no auto focus
or P mode It will help you get to know your camera. Just my 2 cents

What photo shop program are you using?