Hey led. I actually saw how to do the backdrop in an article in Model Railroader at some point.
I found a local plastic distributor, where I could buy 4 x 8 sheets of styrene. I got one sheet of 1/16" styrene, and cut two pieces for the backdrop, then glued them together. I very crudely cut out a slot in the base foam core to simply slip the backdrop into. The backdrop actually leans a little bit towards the small town side, so I eventually need to do something about that.
As far as the images I printed out (which I believe is a much better, and much cheaper alternative than the expensive stuff you can buy), you just need to figure out about how large you want a building to be on the backdrop, say 6" across for example, then use some kind of photo editor to size the image to that width. You can do that wit a lot of programs, but I had to do quite a bit of editing on the photos to get them to look right, such as straightening them out, removing stuff I didn't want in the image, combining photos, etc. Gimp is a free software, similar to photoshop you can download to do that. The learning curve is actually not very big to do the couple of things I mentioned.
Hope that helps. Make sure you post a link to your layout on here at some point.
Thanks