FancyMenu lets you set a custom background for menus. You can set images, animations (FMA), videos (FancyMenu v3.6.0+), slideshows, cubic panoramas (like in the Title screen) and more.
To set a menu background, right-click the editor background and click on Set Background.
In the screen that opens, choose one of the background types, like:
Select one of the types and then click on Configure Background in the bottom-right to configure the background type.
To remove the custom background you set earlier, just open the Set Background screen again and this time, click on NO BACKGROUND [RESET BACKGROUND]. Then click Done. This will revert the background back to Vanilla.
Menu backgrounds can stack! If you have multiple layouts active, backgrounds of all layouts will stack. If you combine this with transparent backgrounds and the Parallax feature of some background types, this allows you to make multi-layer parallax backgrounds!
To sort layouts and make them show up in a specific order, right-click the editor background and click on Layout Index.
Since there is nothing behind backgrounds, it is not possible to make the background at the very bottom transparent, because that would result in graphical glitches, but it is absolutely possible to use transparency for stacked background setups, as long as the bottom one stays as full opacity. That way you can have translucent background layers on top of the bottom one.
To make a background image translucent, use an image editor of your choice.