Background images are not just pictures that are sent behind other objects - they are graphics that are set as the background of the page itself. Think of it being like having pre-printed stationery.
With nothing selected, click the second icon in the Inspector palette and use the Image popup menu to select a ready-made web-format, web-optimised graphic; GIF, JPEG or PNG. Alternatively, hold down the Shift key while you drag-and-drop the graphic into your page. Then control the horizontal and vertical image tiling with the menus that appear. (NOTE: the latest versions of Freeway don't require images to be made web-ready first. But note that they will all be produced as JPEGs; there's no option to control this at the moment.)
Image tiling? What’s that? When you put an image in as a page background it will automatically be repeated both horizontally and vertically as necessary to fill up the page - and the browser window when you preview it. If you prefer you can set it to be pinned to the top, middle or bottom and left of the window instead, and pin it to the left, centre or right horizontally.
Try making a web-ready graphic that’s, say, 30 pixels tall by 2000 pixels wide. Fill it with a solid colour and fill a 600 pixel-wide section in the middle with a different colour. Apply this as a page background, set it to be centred horizontally and tile vertically, then arrange your layout within the middle section and set the page to be aligned to the centre as well. This will give the effect of a ‘page within a page’.