I am fairly new to KDE and Linux/Unix in general. I have the below command line which I am entering into a xterm window in a KDM environment. I have a program which has two different versions intalled on my computer version 2.0 and 2.1. What I want to do is to have the background change based on which version of the program I am running. I have looked into the below command line but when I type it following a *.jpg file it does nothing. Does anyone know how this would work?

dcop kdesktop KBackgroundIface setWallpaper /home/crouse/Wallpapers/

You're missing a parameter there. You need to add a mode number after the path. You also need to make that path to a particular file - using a directory or wildcard won't work. For example:
You can look up the parameters for a particular DCOP call using the kdcop utility. And no, I don't know what the value 6 does in the last parameter. If you're curious, you can look up the source code or developer documentation. Or you can just try numbers until you find one that gives you the effect you want.