I don't think that your issue is with the "stretch" not being defined...but rather that you are seeing the default behavior of IE when the size of the Table exceeds the size of the image.
What you are up against is the fact that Auctiva is, as you said, resizing your image and that means that you are going to get the tiling effect going on...
I don't think you can change the way Auctiva resizes images, causes that is the way they do it here...but you might be able to find some other place to host that one picture and then you'd be able to see if it works correctly.
From everything I know about putting an image as a background in a table, you'll need to keep the table the same size as the image. Otherwise it will tile...
G'luck...
Mike