Backgroung Shader is a material that you apply to your object. What it does when you render is allow to see shadows, reflections but not the actual surface.

example: You have a background image of a parking lot and want to but your modelled car in it. To cast shadows you would use a plane under the vehicle and apply this background shader. when you render you will see shadows being casted as if there where actually in the picture.

Hope this makes sense.

It does work with Mental Ray. What version of Maya are you running.