The parallax effect is the new "motion" wallpaper laying behind the app icons on iOS 7. The subtle effect is meant to give some depth to the flat design of iOS 7, though some have said it gives them motion sickness. However, if you like parallax and want to make your own wallpapers that work well with the effect, you may want to check out a great article by CNET's Jason Cipriani that describes the process.
Cipriani notes that photos depth and texture work best. If you pick a photo which has virtually no texture and is only a single color, don't expect to get much motion from your background.
Also, make photos at least 400 pixels wider and taller than your iOS device's scr