that picture is of the native uv coordinates ( think of it as every plane placed ontop of each other in a perfect square), completly usless for you, you need to unwrap the model, I have never used lithuwrap so youll have to ask another member,
I hope the model demostrated how to save polies, and i didnt mean to steal your thunder, it was to simply show what you should be aiming for,
I used your model for the outline using freeze tool and box modeled in the rest,
I was very very *messy* when it came to my first few models, i still am when am just throwing ideas around.
cheers cb
Freedom has always had a price... Most will never know it, Some will pay your dept,