You forgot to mention what the problem is exactly…
Do you want the image to be vertical, rather than horizontal? If so, I think you need to rotate the image file outside of blender, as there don’t seem to be rotation controls for the background image.
Alternatively, you could use an empty. Look at these instructions on Blendercookie.
You can use empty to display image in 3d view and rotate it how you want. Just add empty and choose image in object data ( tab is near scene , render, modiefiers, material ,and others in proporties panel )