Boss Paper
Boss Paper is an app that allows background wallpaper for devices that don't have background wallpaper (iPod touch 1G, 2G, iPhone, iPhone 3G). It takes little RAM for it show the background. It is very configurable, so there are many settings including changing wallpapers, dimming wallpaper, rotating wallpapers and more! This app is also good for the devices that already have background wallpaper (iPod touch 3G, 4G, iPhone 3GS, iPhone 4) Definitely something to check out. It's free too! Here are some screenshots of the settings in Boss Paper

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