The URL can be relative (as in the first line above) or absolute (as in the second line above).
If you want to use a background image, you should keep in mind:
Will the background image increase the loading time too much?
Will the background image look good with other images on the page?
Will the background image look good with the text colors on the page?
Will the background image look good when it is repeated on the page?
Will the background image take away the focus from the text?