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 screen resolution. This is because the wallpaper needs to shift in the background to give the appearance of motion. If your wallpaper is just limited to the iOS device's screen resolution it will need to be zoomed in on, which can create a less than desirable look. For iPhones and iPod touches with a 4-inch screens, use an image that's 1,040 x 1,536 pixels. For Retina display iPads you'll want 1,936 x 2,448. For more tips and screen resolutions, be sure to check out Cipriani's article.