If you are having trouble, post your issue to the Circos Google Group and include all files and detailed error logs. Please do not email me directly unless it is urgent—you are much more likely to receive a timely reply from the group.
In addition to the colors you define in color.conf, an additional color called "transparent" is automatically defined for you. Therefore, if you try to define your own color of this name, your definition will be ignored.
To create an image with a transparent background, set the background color to "transparent".
<image> ... background = transparent </image>
To draw the image on a existing image, specify the input image file for the background parameter. This works only for PNG images.
<image> ... background = data/8/background.png </image>
The input image must be of the same size as the output Circos image (it must be square and have dimensions 2*radius x 2*radius, where radius is specified in the <image> block).
Instead of drawing on an existing image, you can compose a Circos image with a transparent background together with a custom background during post-processing. However, having the ability to draw the Circos image on any background is useful when you automate Circos image generation and require a watermark or logo on each image.