I've been wanting to learn how to do backgrounds for blogger and finally took the time to figure it out. Turns out - not too hard! I did both this site and my friend Joann's.
First you make a background 'slice':

And then you code blogger to use that slice as a background, repeating in the y-direction.

Here is the 'slice' for Joann's site:

And here is the finished blog.

Fun!