Safe.mn addresses the two main criticisms to URL shorteners: security and transparency. All links are thoroughly verified for viruses, malware, phishing, malicious content, session stealing, cross-site scripting attacks, etc. Any suspicious link gets flagged, and users are warned about it. Safe.mn is also the most transparent URL shortener service: all links generated by Safe.mn are publicly available, and updated regularly.
What features are missing? Would use Safe.mn over your current URL shortener? All comments are welcome.
All that you'd have to do is get rid of the big blue header completely, image and all. Just have your regular "Safe.mn, URL Shortener" header then follows the nav (Home, Tools & API, FAQ, Community/Feedback) and then your content. You could even make the main header that is currently white, blue.
I just think if you got rid of the header, your page would be much more cleaner and to the point.
Ugh, this may be an even bigger problem than your design... http://www.techcrunch.com/2009/07/16/bitly-starts-starts-warning-of-malicious-sites/
As for the design, I agree I should probably remove the bird. I'm still not sure how to redesign this part of the page.
You've got a really big uphill battle on your hands if you want to try to get any traction against bit.ly. I really think you should take a look at them for ideas as far as design. The great thing about bit.ly in my opinion is the simplicity of the page. All they really have is their logo/name and the fields to shorten a URL.
Below that they have another really nice feature. They track all links much like you do but they show you a history of your shortened links right on the main page even if you don't have an account with them. You can also see graphs of your link traffic.
As for how to redesign it, I would just say simplify, simplify, simplify. If you're not sure what to do in that blue/sky area, I say just remove it. It doesn't really serve any purpose the way it is now. Boil it down to the bare minimums as far as what you need to say. There is quite a bit of text on your page. People don't read. You will really need to boil that down to the key points, bulletize it, and maybe add some icons/pretty graphics to get people interested.
Your main problem is just the traction that bit.ly has now. They are the default shortener for Twitter. They are integrated in almost every service I'm using. For example, CoTweet supports using bit.ly to shorten URLs in its interface and if you give it your API key, it pulls in your bit.ly stats for clicks and what not right into its interface. I'm also using a WordPress plugin on the launchly blog that works with your bit.ly account to shorten your blog URLs when it tweets about them so that you get the same bit.ly tracking you normally would associated with your bit.ly account.