This is my somewhat anticipated post about eliminating backstory in novels. I must rush to the airport soon to fetch the Poetess of Boise, so I'll be brief. Hopefully there will be time to read your comments later. No promises.
Suppose your novel begins with a big chunk (a chapter or two) of backstory. Or, suppose you have big chunks of backstory in other parts of your novel. In either of these cases, you may have decided that you don't want the backstory coming at the reader in big blocks that slow down the narrative, but you don't know what to do about it. How do you get rid of these big blocks of backstory? I have a couple of suggested techniques for this, which I call Cut and Move and There Is Only Now.
Cut and Move is pretty simple, because it's just what it sounds like. You cut out the whole block of backstory, removing it entirely, and stitch together as necessary the bits of story that surrounded the backstory, so that it flows together over what was for a moment a huge gaping hole in the narrative. You've deleted your infodump for all time and patched over the seam. Next, you read through your manuscript and see what parts of the story no longer make sense to the reader without the missing backstory, and mark for inclusion only those bits of deleted backstory absolutely necessary for the story to remain intelligible. I think you will find that most of the backstory you cut out is unnecessary to the story. Keep in mind that just because your prose is important to you, that does not make it important to your reader.
Where do you put this recycled backstory? Only where it has to be. If something is necessary for the reader to know, you tell them when they must know it, at the last possible moment and in the least obtrusive manner as possible. I recommend using the plainest prose you've got when writing about this stuff.
Cut and Move works best for historical or setting details, when talking about a place or an object. If, however, you are writng about characters and are establishing motivations and behaviors, Cut and Move doesn't work so well as does a technique I call There Is Only Now.
There Is Only Now is based on the idea that your reader doesn't care as much about the past as she does about the present in your story. In other words, we don't want to know what happened, we want to know what is happening. Don't tell me where your protagonist has been, tell me where he is right now, and where he's going.
Which is to say, whatever character traits you want to show, you can show them in the story present. Take your backstory telling about the traumatic events in your MC's past that result in his being afraid of fire or whatever, and rewrite it so that the events (or something similar) happen in the story present. Show us how your character is Now. There is only now.
Is there a ghost who's angry about a past lover's betrayal? Show the ghost Now, acting out that anger. Do not give us a prologue or a flashback. We don't know about the past lover and why the ghost is angry? That's good; it adds a mystery for the protagonist to solve, and that adds action to the story and action is good.
In my book, I had a scene where my protagonist's father was begging for a favor from a powerful man. I rewrote it so that it takes place years later, in the story present, and the protagonist is begging a favor from the powerful man. It's much more dramatic and compelling. We see the protagonist acting in the Now.
The biggest problem with backstory is that is tends to show characters as people things happen to instead of people who do things. If you take the same events from the story past and make them into events in the story present, you get to see the characters acting (which is always more interesting), the details and character traits become more compelling and memorable, and the story itself has forward momentum. Things are happening Now.
An observation about complex backstory: If your backstory is so complex that you simply cannot use the suggestions above, I might be inclined to think that either a) your story is too complicated to be intelligible to most readers, or b) your backstory might be the real story you want to write and you should think about that.
A final caveat: It's not necessary that you take any of these suggestions, nor is it necessary that you write books that don't have big chunks of backstory.