Following on this post, let me explain further how the graphics hardware rendering the background worked.
The general idea is that a memory is written by the CPU with some pixel information and some hardware counters are used to scan the memory while the output of the memory is taken to the screen. The CPU can control how the scan is done by changing the starting locations of the scan. This is used to produce scroll effects.
Now, the low level explanation for those interested:
There are two memories (8P and 8S) combined to make a single 8kB memory. Now, if you look at the blocks labelled 7P, 7R and 7S they constitute a multiplexer. This is a selector between the CPU address lines (AD) and something called ROH. I think ROH stands for Rotated H count. For each pixel in the Horizontal direction we get one count in the H lines. Only ROH2, ROH3... and so on will reach the memories. ROH0 and ROH1 go through the top part of the schematic. This means that each position in memory represents 4 pixels. If you look at the inputs of 7R you will see ROV1, that is the vertical counter. Notice that we are missing ROV0. ROV0 represents the interlaced lines. Not being here means that background doesn't use interlaced resolution but plain progressive display. This translates into each position in memory representing two horizonal lines.
The scroll: If you look at the left hand side there are 7N and 7M. These are counters. Once per line the start up count of the counter is read in. Then the counter will just count up. These counters eventually drive the background memory (8P and 8S). So by changing the start-up count a simple form of horizontal scroll is achieved. Note that each line can have an independent position so the visual effects such as a wave moving the whole screen -so common in Atari and Amiga demos- can be achieved very easilly with this hardware.
The vertical scroll is controlled with chip 8N. This just sets the offset for the vertical count (ROV) that will be used to render the current line. This is the piece of hardware involved in shaking the screen when Bluto appears at the beginning of a level.