Emacs 23 just added the functionality to change the alpha value of the current frame to make it transparent. I just type the following command in .emacs:
There is a way. Install Xfce terminal, which allows you set background image in terminal and start emacs in no-window-system mode from inside the terminal.
Using screen/tmux (some sort of terminal muliplexer) you can dedicate a terminal session to emacs.