This thread is closed but seems to be about the same issue. It didn't have a solution though.
If I have the effects set to none, my chosen background image comes back but with it on either of the other settings the background image goes black. I can still see a piece of it through the panel at the bottom because it is set to transparent. It's still kind of there but not showing up.
I have a Sony Vaio with a Radeon 9200 GPU. Desktop effects and Compiz worked fine in 9.04 and 8.10 but I just did a clean install of 9.10 and the problem was there from the first time it booted before I changed anything.