Background images can be full color, 24-bit images but they can also be gray scale if that’s what you want. Each image in the xsheet is automatically held until it is replaced by another image or stopped by inserting a blank image so you do not have to copy and paste the background image into every frame.
To import an image into the background highlight the square in the xsheet that is frame one in the background level. Then click on File> Import > Stills.
Since backgrounds can be bigger than the frame to allow you to pan and zoom on them, you have an option during the import process to scale the image to fit the frame. If you don’t turn that option on, then the size of the background is determined entirely by its resolution. It could be bigger or even smaller than the frame you’re putting it into.