The information can be found on:
http://www.cisco.com/en/US/partner/docs/voice_ip_comm/cuipph/7906g_7911g/7_0/english/administration/guide/11cust.html
Notice the above is for UCCM, but I have adapted a little bit to make it more general.
To configure custom background images for the Cisco Unified IP Phone, follow these steps:
Procedure
Step 1 
Create two PNG files for each image (a full size version and a thumbnail version). Ensure the PNG files comply with the format guidelines that are listed in the "PNG File Requirements for Custom Background Images" section.
Step 2 Upload the new PNG files that you created to the following subdirectory in the TFTP server:
/Desktops/95x34x1
Note The file name and subdirectory parameters are case sensitive. Be sure to use the forward slash "/" when you specify the subdirectory path.
Step 3 Use a text editor to edit the List.xml file. See the "List.xml File Format Requirements" section for the location of this file, formatting requirements, and a sample file.
Step 4 Save your modifications and close the List.xml file, put it on your TFTP server and restart the phone.
