We have Windows 7 Home Premium 3-bit on one computer and suddenly couldn’t change the wallpaper. This seems to be a problem out there. There can be various ways to fix it. This one worked for us:
- Hit the Start ball
- Type “adjust appearance”
- A link called “Adjust the appearance and performance of Windows” will appear. Click that.
- Toggle the top check box “Animate controls and elements inside windows”
Worked for us. Your actual mileage may vary.