I've used the method you describe without problems.
If your background image gets too big, you might want to break it apart. The tiled background is more efficient than sprites, so use it if you can.
Don't forget about parallax effects. You might want your background broken into several layers so that you can take advantage of it.
You do have to be careful of putting moving objects, like a player or enemy with platform behavior, in positions where they can get stuck inside of solid objects.
For this reason, the platformer behavior works much better if it is applied to an invisible sprite object that has the animated sprite pinned to it (or moved along with it) rather than applying the platform behavior directly to the moving sprite, with its changing collision masks that could get stuck inside a platform.
Ashley's How to make a platform game tutorial is a useful resource.
Another awesome feature is the ability to change angle of gravity. Sqiddster takes this to the ultimate, as described in How to make a gravity-based platformer
Just a start. I'm sure others can add to this.