Sorry, my reply wasn't exactly accurate. You are correct that 'css_expression' is meant for IE's 'expression()'. I will look more into this.
Added on 07/03/10: When 'css_expression' is not set to 1, as is the case in htmLawed's default setting, any '\*' is removed from 'style' values. This changes the CSS markup in the 'style' value in the example input (in the first posting) and 'inactivates' the second URL (at least in Firefox 3.6/Mac OS X), giving the impression that 'css_expression' of '1' introduced a vulnerability.
The display of the background-image itself is not a vulnerability in an absolute sense. By not permitting the 'style' attribute, by setting 'safe' to 1, by using 'hook_tag' or$spec, etc., such a 'risk' can be removed by the code-developer who is implementing htmLawed.