You need to add 2 parameters, while you initializes a new instance of the Uri class .
new Uri("background.png", UriKind.Relative)
Next step is to add image to the project.
Image Path:
Assets/background.png
The last step is to add image to the View.
LayoutRoot.Children.Add(myImage);
Image myImage = new Image();
myImage.Source = new BitmapImage(new Uri("Assets/background.png", UriKind.Relative));
LayoutRoot.Children.Add(myImage);