Hi Hotshot,
try placing the function after the function call:
GLOBAL BACKGROUND=0
SETSCREEN 640,480,1
LOADSPRITE "picture.PNG", BACKGROUND
SHOW_BACKGROUND()
SHOWSCREEN
MOUSEWAIT
END
// This is your function
FUNCTION SHOW_BACKGROUND:
DRAWSPRITE BACKGROUND, 100, 100
ENDFUNCTION
Cheers,
P.