Copy this into viewDidLoad. It will check for iOS 5 and use the preferred method, otherwise it will add a subview to the navBar for iOS versions < 5.0. This will work provided that your custom background image has no transparencies.
float version = [[[UIDevice currentDevice] systemVersion] floatValue];
NSLog(@"%f",version);
UIImage *backgroundImage = [UIImage imageNamed:@"myBackgroundImage.png"];
if (version >= 5.0) {
[self.navigationController.navigationBar setBackgroundImage:backgroundImage forBarMetrics:UIBarMetricsDefault];
}
else
{
[self.navigationController.navigationBar insertSubview:[[[UIImageView alloc] initWithImage:backgroundImage] autorelease] atIndex:1];
}