Something's not quite right here...

*gulp* I figured that would happen to somebody, but I think I know what's going on...

cthorpe:
Looks like you got some desktop widgetage going on. That could be what's up.
In my experience, apps that mess with your desktop in any way can sometimes change the desktop look and behavior.

Cool trick Edvard, but it does not work if I choose to hide desktop icons by right clicking on an empty area on your desktop and unticking 'show desktop icons'. Any idea why?

Phil:
As above... For example, when I have PowerPro hiding my desktop Icons it disables my desktop right-click.
Explorer treats your desktop as a directory like any other, albeit a special one that contents get sent to your display, and has some special contexts and properties associated with it. The X folks would tell you it's the "Root display window" which all other windows go on top of.
When you do things to the desktop, you are asking another program to control how Windows interacts with that particular folder.
"Active Desktop" AFAIK asks Internet Explorer to handle desktop duties. (if not, it's Explorer using IE's html rendering facilities...)
So when you hide the desktop icons, some Windows component is no longer handling the desktop, and perhaps that is the problem.

So, try this trick with a "dry" desktop. No Active Desktop or Widgets or hiding stuff, etc.
If it works, then start adding widgets, effects, etc untill you find an app that changes the behavior of the root display.
Whatever the culprit is should have a configuration option to fix it.

If it doesn't work... :shrug:

BTW: Many thanks to Mouser and Veign for blogging this... You really know how to make a guy feel *almost* famous.

Tell nudone to find another job! I've got an endless supply of great looking wallpapers now!