Where are you making the choice to get the background image from the file system?
In CSS Menu Writer if you choose to edit the theme and go to the design tab you should be able to select the part of the menu that you want to apply the background to and using the folder logo you can browse to the image to use. Here is a screen shot of this as a reference so you can see if we have the same interfaces. Please post back and include some more info about the exact steps you are taking to implement the background image and perhaps include a screen shot so that we can have a visual reference for the issue.
