Few ways to do so.
First, click View > Master > Slide Master.
Click Insert > Picture > From file.
Select the picture and click Insert.
Enlarge it so that it covers the entire slide.
Right click on the picture, select Order > Send to back.
From the picture toolbar, you can edit the brightness and contrast. (If it
does not show up, click View > Toolbar > Picture)
If you want to adjust transparency, you can use custom animation to do so.
Click Slide Show > Custom Animation.
Select the picture.
Click Add Effect > Emphasis > Transparency.
Set the Start to "With Previous".
Set the Amount of your preference.
Close Master View once you are done.

Another way is to click Insert > Picture > From File.
Select the picture and click Insert.
From the picture toolbar, you can edit the brightness and contrast. (If it
does not show up, click View > Toolbar > Picture.)
Now, right click on the picture, select save as picture.
Look for a preferred format (e.g. png).
Click Save.
Now, click Format > Background.
Click on the dropdown field, select Fill Effects.
Click on the Picture tab, click "Select Picture".
Look for the picture you want, click Insert.
Ok your way out and click Apply to All. This will apply the background to
all the slides.

For editing pictures, the best software would probably be Adobe Photoshop.
Check out www.adobe.com for more information.

As well as what Tohlz says about brightness / contrast sometimes you can get
a good effect by putting a rectangle of solid or gradient colour over the
picture and adjusting the transparency. You can either do this on the master
or group, cut, paste special as png and save as a picture  for use as a
background