The best way to modify the background is through your skin. The background setting on the site settings page will only get applied to the entire background if your skin doesn't have a background in place, and in your case the default skin has a white overlay being put in place.

Ok for the theme in question I just commented out

/* CSS Document */
/* body {background:#FFF url(images/body_bg.png) repeat-x top left; height:100%; margin:0px; padding:0px; } */

In the skin.css file and it worked on the portal I was trying to fix and did not seem to visually effect any other portals using the same skin..

Thank you for your help