I experimented with the template functions listed here:
http://help.blubrry.com/blubrry-powerpress/customizing-with-your-wordpress-theme/Which are:
<?php the_powerpress_content(); ?>
and
<?php if( $episode_content = get_the_powerpress_content() ) { ?>
<fieldset class="episode-box">
<legend>Podcast Episode</legend>
<?php echo $episode_content; ?>
</fieldset>
<?php } ?>
They both worked perfectly on my XAMPP/localhost installation. And the original, simple background image scheme that I had been using for the past year works perfectly there also, where the player appears in the default position at the end of content.
So I created a new addon domain at my webhost for testing purposes before I made any changes to my actual blog. I installed the current WordPress and PowerPress and my custom theme. The media player plays correctly but the background image will not show.
But the surprising thing was, when I added the background style and the image to the default twentyten theme it did work.
So I guess it is an issue with my theme but the strange thing is that my theme worked for at least a year. And it still works with XAMPP/localhost, although I do have to change the positioning on the background-image when it's on localhost.
So there must be something different about the way that XAMPP processes all of it and the way my web host server processes it.