ideas on fixing bad photo

I'm trying to make an icon with teh following picture, but as you can see, it's a pretty bad photo. I've gone through memories, looking at tutorials about fixing screencaps etc, but I just can't seem to get it right. Can anyone give any tips helping me fix this up so I can actually go about making something decent? I've put it under a cut - I think it's about 200px x 200px.

edit: I'm using Photoshop 7





I've got the full sized pic here - opens in new window as it may not be showing all its ugliness in hte smaller pic...heh