Just go into the com.apple.desktop.plist (in your user's Library/Preferences directory) file with pico or your favorite text editor and remove the key for placement as well as the string for it. Take out these lines:
<key>Placement</key>Then save the file, log out and log back in. Your background should now be tiled.
<string>Crop</string>
NOTE: Your background must have been set before you logged in. If you set a new background, you will have to log out and log back in before this will work. I don't know why. Also, I am working on finding a good way to do this with the defaults command.
[Editor's note: I have not tried this myself yet, but if you try it and it doesn't work, you should be able to delete the plist file and the system will create a new one for you.]

