Background music is one of those umbrella terms that can refer to a great number of things. Simply put, it's music played in the background; the context of the term is entirely dependent on what exactly is in the foreground. And depending on that context, calling something background music can sometimes be seen as an insult, however unintentional. Musicians functioning as a backing band for a singer or soloist usually resent being referred to as background music; the term tends to connote something that isn't really paid music attention to.
But that's not always the case. Background music is an important element in a variety of different events or performances. The background music at a social gathering or bar can often determine the overall mood of the people in attendance; it's not uncommon to find tempers rising and fights breaking out solely because the combination of personality and harsh background music made a lethal cocktail. Background music is also vital to film and television; a great song can often make or break a scene. For instance, the television producer Thomas Schlamme (of "West Wing" fame) and film writer and director Quentin Tarantino ("Kill Bill," "Pulp Fiction") have both used background music to amazing effect, choosing music that is at times barely noticeable but still capable of completely driving the scene. Great background music can make the tragic scenes more tragic, the comic scenes ten times more hilarious; and likewise, inappropriate or poorly composed background music can rip the magic right out of even a perfectly written script.
Selecting background music for a performance or event is an art in and of itself. The background music at a wedding or fashion show is just as vital to the event as the background music in a performance is to the singer or soloist. It's not a rule-driven process; background music is entirely subjective to the person choosing it. Theme and content are important to consider, though; just like you'd rarely play heavy metal while a bride is walking down the aisle, you'll almost never hear a Mozart piece in a bar packed to the walls with college students. And when considering (or composing) music to be played behind a singer or soloist, it's important to remember where the focus of the performance lies; it's not uncommon to hear background music that upstages the performer.