The Backdrop application is the one which appears on the MessagePad screen when you power on your Newton PDA (Personal Digital Assistant).
In the Newton 2.0 OS, the Make Backdrop option is located in the Memory Info area, in the Extras drawer. You can get to the Memory Info area by tapping on the 'i' in the lower right corner of the MessagePad screen.
Apple chose to put the backdrop option in the memory area instead of a setup area since users may want to change the built-in make backdrop over a period of time, not just during the setup.