"paste into background kills the background when you move away"
But Add Backdrop doesn't?
"instead, you have to make your collisions relative to the level file itself, if that makes any sense. You can allocate a few values for your objects to test what kind of tile is above, below, and to either side, and use those to do appropriate collision detection."
Yes, that sounds about right. I've done it in another game I made in C++ some time ago, so it should be pretty much the same in MMF.
Yes, if you simply use Text Blitter for display ONLY, and have collision/movement done by just checking/adjusting values on a matrix, its the most efficient way.