How? Depends on how many layers you have in the image and what you want as a background.
You have only one layer, named Layer 0: Layer|Flatten Image You have more than one layer and you want a specific layer to be a background: Target the layer and then Layer|New|Background from Layer
See the online help file. Enter "Background" as a search term and choose: About the background layer
Advantage? None that I know of except perhaps that by naming it background, it is not a layer and is automatically locked.
Why would you want to convert a layer into a background?
The reason to have it as a Background is to know that it is a Background and can not be moved nor up or down in the palette nor inside the canvas because it is aways locked, but that is true only if it is an originall file..
Any layer converted like Tony says does not lock it as a background you have to lock it.
I start out with a White Canvas and build up my layers. Very often with Styles which later will be used as a Background I Rasterize it and delete the White original Background.
Now I put the desired Layer at the bottom of the palette, call it "Background" give it a color coding and lock it.
