Doesn't matter, CSS works on a top down basis, you set the background image in the CSS, but then you set it again on the body tag with the invalid file name, so it can't be found. For some reason IE is ignoring the declaration on the body tag.
Just remove the extra background option:
<body style="[B]background-image: url('Untitled1.jpg'); [/B]background-attachment: fixed">
And it should be fixed when you reload.