You of course have to either name the uploaded background image to bg.jpg or change the code to the name of the background image you uploaded. Also make sure you uploaded the image to the images folder. Everything looks good in the code. As an example here is the code I used on
one of my sites. The background image is quilt1.gif and I added padding to the top and bottom of the Body Style container along with setting the background to fixed so it doesn't scroll.
HTML Code:
font-family: Georgia, serif;
font-size: 0.8em;
color: #000000;
background: url(/wp-content/themes/atahualpa/images/quilt1.gif) repeat top left fixed;
padding: 20px 0;