You cannot have images. The workaround is to use autoactivate (on a button) to go to a different menu that changes the image in the background for that button. You create multiple menus, with an ordinary state for all buttons in all menus, except for the "highlight" different for the "selected" button. Mouseover won't autoactivate, so this doesn't work on a computer the way you'd like.
You change color by use colors sets. Auto is usually on by default and this is picking up color from the PSD.
http://help.adobe.com/en_US/encore/cs/using/WS59BED893-683B-492e-847C- 254257E34581.html