Occasionally I find a large image I'd love to use as my header, but it's very tall, sometimes 400px-600px. Rather than crop it down to 150 or 200 px height, is there a way to use as my header, but have it continue past the header position down into the body...so that the lower part of the image forms a background behind my page menu, sidebars and body content?

Just add the image to the Body Style box and make sure the center column and sidebars have no background colors or images in them. Also make sure this background image is not too big (file size not pixels) or your page will load slow.

Thanks Larry
By adding it to the Body Style box in this way, will the image stretch up to the top and fill the Header image area? Or do I need to make any other adjustments in the Layout of Header Image options pages, or adjusting padding/margin settings?

Above the background body box there is an example of how to display a background image. I would suggest putting one in and seeing what happens and then experimenting with various parameters for that background line. You can read more here. Scroll down until you see "Background - Shorthand property".