The pictures used should have well differentiated color areas, which may be solid or stippled, to fill easily. Clipart is excellent for this purpose. If there is a gap where the same color flows into another area, the fill will not work.
If Color Tolerance is switched off then switch it on in Screen Preferences. Color Tolerance will then allow you to preview the border, which should reveal any problems with color areas in the picture. You can then alter the picture in a picture editor such as mySewnet™ Draw & Paint or Preview. Alternatively, use the Freehand or Point Create functions to place the border.