360 shooter.... scrolling background

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I want to get a seemless image that I can create a 'endless' feel to the background

2 questions on this:

1. Is there any easy way to make a image seemless in all 4 directions? Any freewere programs out there?

2. The obvious way to do this would be to lock the player in place while instead, moving the background and objects in the oposite direction. But how would you detect when to draw another background image(when the end of the first one enters view) and where would you draw it?

The image would probably be 1600 x 1200 (double the size of the 800x600 screen)

Thanks for any help!