Here is where you set your desktop pattern or picture.

You can scroll through the list of patterns and choose the one you like and click "Set Desktop".

You can add patterns to the list.

First copy the pattern to your hard drive (it can't be on a floppy or CD).
Then drag and drop it to the window on the left displaying the patterns.

If you want to keep the pattern available for other uses, hold the option key to copy it because it will be stored in the System Suitcase from which it is not easily retrievable.

Click on "Set Desktop".

You can also use pictures for your desktop.

To use a picture you can drag & drop a picture as described above or

Click on "Place Picture", an open dialog box will appear.
Navigate to the picture you want to use and click choose.

You have choices as how to use the picture.

If you want to fill the screen with your picture it has to be nearly as large as your screen resolution. Otherwise it will become distorted.

Unlike patterns you can use pictures from any folder on your drive. Although it is a good idea to keep them in a particular folder so that you can easily find them when you want to change pictures. The pictures that are loaded with the system are in HD:System Folder:Appearance and this would be a good location to keep the pictures you use for desktop pictures.

You can also quickly access the desktop tab in the Appearance Control Panel from your contextual menu and choosing "Change Desktop Background". Just Control Click on the desktop and you can very quickly make your attitude adjustment.