I went through a lot of threads of people explaining how to link to a static resource image in your CSS. My code looks fine to me, yet it doesn't work.
I have put the css file in a folder together with the images folder(which holds the manager_headshot.jpg).
Here's how I reference my css file in my visual force page:
<apex:stylesheet value="{! URLFOR($Resource.static, 'style.css') }" />
And here's how I reference the image in my css file:
background-image: url("images/manager_headshot.jpg");