I have used background image for my template and its not showing me in outlook 2007,
Can anyone help me out with this problem?
Background images are not supported in Outlook 2007. I suggest you use a standard background colour instead.
Again, this comes down to having your email render well without the reliance of background image, so 99% of the time you should avoid using background images entirely (The 1% would be where a background image is for cosmetic use only and doesn't affect your email).
one thing to note... if you are defining both a background image and a backup background colour
<table bgcolor="#FF0000 background="blah.jpg"........>
make sure you do it that way round in the attributes, because if you define background and then bgcolor after, some clients will obscure the background image with the opaque colour, since it is defined second, i believe it renders afterwards