Theme images urls work while in development, but fail on production site.

In the theme, the images are written url(image/core/bg/slidder.jpg);

Which translates nicely in the browser to this:
background-image: url("http://fitlifetest.ca/themes/fitlife/image/core/bg/slidder.jpg");

However, on the production server (Debian squeeze, php 5.3), the urls remain ...url("image/core/bg/slidder.jpg"); they are not rewritten at all?

Anybody familiar with this issue?

Please advise