I ran into this problem earlier this week and found the solution. The customer could not change his desktop background to any of the stock photos in Windows or his own photos...something that any Windows user should be able to do. Turns out that the root cause of the problem is spyware. Even after removing the spyware a registry (skeleton of Windows) entry gets left behind disabling the users ability to change the background. Deleting this entry restores the ability for the user to again have a normal functioning desktop.
WARNING: THIS SOLUTION IS ONLY FOR COMPUTERS THAT HAVE THIS SPECIFIC PROBLEM. AND IT IS INTENDED TO ONLY BE CARRIED OUT BY AN EXPERIENCED TECHNICIAN OR COMPUTER USER WITH REGISTRY EXPERIENCE.
HOW TO MAKE YOUR ICO TEXT TRANSPARENT:
1. Open the Control Panel
2. Click System
3. Click the Advanced tab
4. Click Settings in the Performance section
5. Check the "Use drop shadows for icon labels on the desktop" check box
6. Click OK until you close the windows
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Links:
[1] http://www.yourpcpartner.com/node/990
[2] http://www.yourpcpartner.com/node/984