1. I need to display a background image in xsl for the whole page. How do
we do that

2. When i try to give the relative path , images do not get displayed. It
works when i give the absolute path. I am working on windows 2000 and using
cocoon framework to generate PDFs dynamically.

Now you are really off topic here. Check the Cocoon website,
the relevant how-tos there, and
 http://xml.apache.org/fop/configuration.html#summary-key-value
You need to set the baseDir value.