Scenario One : would be to put it into the body tag with the edge color being the same as the background-color.
Scenario Two : but what do you do if you want to use for example a gradient or maybe even a pattern in the overall background? Your first choice might be to put then this background pattern or gradient into the body tag and to add a wrapper type div tag to add the large background image which sits behind the rest of the design.
Put the background gradient or pattern into the HTML tag and the large background image into the body tag (alignment set to top center). No additional div needed.