Backgrounds and and transparent tiles not working.

Turquoise tiles with full transparency and a Sunset Overdrive background.

I'm having the same issue. Tried hard reset, unplugging the Xbox, changing the background, tile transparency and none of it worked.

A solution can be found here (relevant parts included for your convenience): http://support.xbox.com/en-GB/xbox-one/console/change-xbox-one-background

Adjusting the tile transparency allows you to better view your custom background through the tiles on the screen. To adjust this:

1. Scroll left on the Home screen to open the guide.
2. Select Settings.
3. Select AllSettings.
4. In the Nav pane, select Personalisation, and then in the right pane, select My colour & background.
   
5. Select Tile transparency on the My colour & background page.
   

Choose the transparency value that you prefer (Solid, Mostly solid, Partly transparent or Mostly transparent).

The following additional information is taken from
news.xbox.com/.../xbox-one-xbox-one-february-system-update:

Custom backgrounds and tile transparency – We’ve added tile transparency to the Home tiles to make your background images more visible. As a reminder, to set a custom background, go to Settings > My Xbox > My
background. Note: some items can’t be made transparent due to usage rights/restrictions for certain images.



Let us know if the above solution does not work.

There is already the concept of transparent tiles implemented by the Xbox One. It may not be what you envisioned and you may have better suggestion for future updates to this feature. Head over to the Feedback forums and add your own take on the tile transparency
or find the idea that best describes what changes you would like to see made to this feature. If you find an idea similar to what you want out of the feature you can just add your own comments to the idea to help further explain your vision. Cheers!

Adjust tile transparency
Adjusting the tile transparency allows you to better view your custom background through the tiles on the screen.

Note You cannot change tile transparency if your background is set to a solid color.

To adjust your background:

1. 1. Scroll left on the Home screen to open the guide.
2. 2. Select Settings.
3. 3. Select All Settings.
4. 4. Select Personalization, and then in the right pane, select My color & background.
5. 5. Select Tile transparency on the My color & background page.
6. 6. Choose the transparency that you prefer (Solid, Mostly solid, Partly transparent, or Mostly transparent).

I like the transparent tiles. I can actually see my custom background now