To insert a background image click the Background Image button from the Design tab.
Then click on the screen at the point the top left corner of the image is to appear. A window will pop up to allow you to select a file from disk.
The image may be moved by clicking on the margin of the image -- normally the top left corner is easier to locate when the image has invisible colors.
You can re-size a background image from within Simul8.
Additionally, if the background image is selected, you can edit the size by manually entering pixel values for the height and width on the Format tab.