This is pretty confusing to implement multiplatform, as it behaves differently for flash and iOS.
The flash code requires the name of the original background on the left, and the new background on the right.
The iOS version removes all backgrounds and adds the one background that you specify. However, it only accepts background IDs, not background names.
To find your background's ID go into the Stencylworks folder, then games, then your game name. Open up the resources folder and find your background.
The ID is the image's number. For this background, I would use:
[[Game game] setBackground:25];
But for flash, if I were switching from a background called "Night" I would use:
setBackground("Night", "background");