The second button's default template means it will behave like a Windows button (e.g. not show the background image on mouse over). You may need to provide your own template.
There is a good explanation in another question which might help you get started.
This might also help too.
I would probably do something like this:
<Button Content="" Name="up" Template="{DynamicResource BackgroundButton}" >
<Button.Background>
<ImageBrush ImageSource="image.png" />
</Button.Background>
<Button.Resources>
<ControlTemplate x:Key="BackgroundButton" TargetType="Button">
<Border Name="border" BorderThickness="1" BorderBrush="Black" Background="{TemplateBinding Background}">
<ContentPresenter HorizontalAlignment="Center" VerticalAlignment="Center" />
</Border>
<ControlTemplate.Triggers>
<Trigger Property="IsMouseOver" Value="True">
<Setter Property="Background" TargetName="border">
<Setter.Value>
<ImageBrush ImageSource="image.png" Opacity="0.5" />
</Setter.Value>
</Setter>
</Trigger>
</ControlTemplate.Triggers>
</ControlTemplate>
</Button.Resources>
</Button>