In Encore 1.5 when I imported a picture for menu background, I can reduce the size by clicking and dragging the corners... tried this in Encore 2 and it don't work. Is there a way to reduce a photo within Encore 2?
Check the Layers panel. If the background layer is locked, you won't be able to change it. Edit the menu in Photoshop to unlock the layer (double-click on it and then hit OK), and then you can make changes.
Also note that in Encore 2.0, you need to use the Direct Select Tool (the white arrow) or select the layer in the Layers panel. The Selection Tool (the black arrow) doesn't pick up individual elements.