I'm not sure if this problem exists in the iphone or ipod touch as I haven't tried it yet but I'm going to assume so.
I have my site set to display a sticky footer so the content takes up all of the browser window available. While this has worked with some backgrounds meant to repeat both vertically and horizontally, I recently used a non repeating image to find that while it looks alright on the ipad when it's in landscape, portrait does not display the wallpaper properly and there are issues with flipping it over.
If this could be fixed in a future release of Atahualpa, that would be great. I'd rather not resort to using a plugin to have a terrible-looking mobile version.