Did you read the docs? http://docs.djangoproject.com/en/1.3/ref/contrib/staticfiles/
To use the staticfiles app you need to not only put the right things in settings.py, but also run manage.py collectstatic to gather up all your static content, then rsync/copy/whatever that content to the proper location on your server so that the stuff you put in settings.py is valid.
Same thing for media, to some extent (no 'collectstatic' analog). Django's not going to serve your media or your static content in production. That's going to be up to your Web server (Apache/nginx/lighttpd/whatever), and setting that up properly is your job. It's way outside of the scope of Django to do this for you.
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