I was struggling with this for a while...how to set the background of a bitmap.  I read a few suggestions, but none worked for me. 

My need was to set the background of the image to white, crop it, with the end result that after cropping, the background be set to white.

To do this, I used the Clear method on the Graphics class...essentially this sets the background.

Graphics grPhoto = Graphics.FromImage(bmpImage);

grPhoto.Clear(Color.White);

grPhoto.InterpolationMode = InterpolationMode.HighQualityBicubic;

grPhoto.DrawImage(imgPhoto,
                new Rectangle(destX, destY, destWidth, destHeight),
                new Rectangle(sourceX, sourceY, sourceWidth, sourceHeight),
                GraphicsUnit.Pixel);

            grPhoto.Dispose();