I’m not 100% sure why, but this works;
Wrap the whole thing in a new div called #container and change your CSS to this:
background:#FFFFFF none repeat scroll 0 0;
background:transparent url(../images/bg.jpg) repeat-y scroll center center;
I think your problem is caused by the way you built your menu, specifically that 440px bar disguised as a link, it would be better to make a repeating background for it.