Well, I must be stupid. Can't get it to work.
I had to set the position to user1 to get the background color to change. but the background image will not show up. i read somewhere to make the color 'transparent' and that got rid of the solid color background but still no background image.
not sure what i'm missing.
it works if I have random image clicked to yes, but it will not work if its clicked to no. I have a large image so it should show up. I even set it to yes for repeating the background just in case.