Buongiorno from 1 degrees C snowing Wetherby UK :-)

On this page http://tutorial.davidclick.com/2menu.html & illustrated in two parts:

NO Padding no show


Padding Show


I totally do not understand why when the background image has padding added suddenly the background image frame appears. It confuses me because I made sure the background image is bigger than the fox image. For example the image frame is:
120 x 174 & the fox image is smaller at 70 x 86.

So my question is please why do i have to add padding to a background image on another image element for it to show. My head hurts...

Any insights welcome,