That was indeed in the 6.9 version. As of the 7.0 update I had removed that feature.
I *may* reintroduce it, as you're not the first person who has asked about it, and it's really not a difficult thing to add back in.
The main reason I had taken it out in the first place was that, as of 7.0, VDJ only stores a small version of the photo, so that it doesn't have to scale it every time it is used. So blowing up that smaller version to full screen would end up with a very pixelated background.
I'm thinking of doing a couple of things for the next update: Allowing you to keep the full-sized version of whatever picture was submitted (regardless of how it was obtained), as well as keeping the smaller version plus the thumbnail versions. Then it would be simple enough to simply "swap" the background to the current singer, if you wished to do so.
I also have considered doing the same with embedded album covers (in the ID3 tag of an MP3 file), but only for music, and again only as an option. If no album art is present it would of course fall back to the default background chosen.
This will come back soon, as I'm working on the web app, and one of the big parts of that is the ability to use the app to create/change your picture. Phone pics these days are generally really high quality (as in, large dimension/large file size) but this way I can also let the user (or the DJ) "crop" and position the photo for best results for the smaller/thumbnail versions.
