Well yes and no; a jpg can be used for the background image but a .jpg does not include an alpha channel or transparent layer. You can’t force a jpg to be transparent because there’s no provision for it in the file format. Microsoft made a provision for images displayed in Windows that gray with an RGB of 172,172,172 will automaticly be transparent, but a DirectX screen is not a Windows screen so that will not work in RtR.
This background started out as a jpg panoramic photo but using DTXBmp I converted it to a DDS and used a gray scale, high contrast duplicate of the image to create the alpha channel. That’s the RtR default sky behind those buildings.
The only image formats that include a transparent layer (that I know how to use) are Targa .tga; portable network graphics .png; .gif what ever that stands for and direct draw surface .dds.
Most image editing software can handle all but .dds but DTXBmp makes the dds conversion pretty easy.
Paul