How to save an uploaded image in an admin form?
You have used system_settings_form_submit() so you can add custom submit handler for your form by adding this code to your hook_menu

function backgroundimage_admin() {
    $form = array();

    $form['backgroundimage'] = array(
        '#type' =&gt; 'managed_file',
        '#name' =&gt; 'backgroundimage_image',
        '#title' =&gt; t('upload image, huh!'),
        '#default_value' =&gt; variable_get('backgroundimage', ''),
        '#description' =&gt; t("Here you can upload an image to the background!"),
        '#required' =&gt; TRUE,
        '#upload_location' =&gt; 'public://backgroundimage/'
    );
    $form['#submit'][] = 'backgroundimage_form_submit';
    return system_settings_form($form);

}