How to make terminal transparent while still having its own background image?
Solution 1:
Assuming you are asking about Gnome Terminal, select your background image and adjust below transparency slider - it's in same tab in same preferences dialog
Solution 2:
The options for gnome terminal do not allow you to set a transparency mask for a background image.
You can either choose from a solid color background, a background image where you can set the opacity shade of that image or transparent background where you can set the level of transparency for the terminal's selected background color.
If you select a image as a background you wont be able to see tru that image.
What you can do is create an image in a format that allows transparency (ie png) and set that image as your background for the terminal.
Step by step
I have started with this image called ubuntu-backgrounds7.jpg
I have open it with Gimp and set the transparency of it to 75% and saved it as ubuntu-backgrounds7.png
in a folder inside my home.
I then go to Edit > Profile Preferences > Background and set the image I have just created as the selected background for my terminal.
You can then adjust the opacity for the background with the slider to get the desired shade on your background.