I just loaded one of the water ballon pictures as my Xbox 360 dashboard background, and it looks pretty good, so I thought I’d go through the steps of you can to do it:
All you need to do is download the hi rez version of this photo, then put it on a USB memory stick. Pop it into your Xbox 360, and sign in with your profile. Once you sign in, go to the Media Blade, then to Pictures. Go to Portable Device (this is your USB memory stick) scroll to find the photo (you’ll see a thumbnail) and when you have the photo highlighted, press X. That will make the photo your background on all blades as seen below. (You can not make a different image for each blade, only developers can do that with themes.)
Click the below image to see a full size version of what your dash will look like.