I have been reading around and the general consensus is that if you can use tiled backgrounds / maps / levels then you should by all means use them. Here is an explanation I found useful:
"So, you want to put nice background into your game, but the picture would be too large and make game very slow. What to do? Slice the picture into tiles!
If you slice up the picture and reuse same parts in different areas, you have created the tiles. The big picture has much bigger filesize then tiles.
Other nice feature about tiles is, when you might want to replace part of your background, then you dont have to redraw everything, you can only replace 1 tile. You can reuse the tiles with different objects too. For example you might have tile with grass and another tile with flower on the grass, then you can take same grass background and only draw the flower."
Original source: http://www.tonypa.pri.ee/tbw/tut00.html