Thank you for this thread.
I just had exactly the same problem.
I had started down the path of taking stuff off my desktop gradually and eliminating the wallpaper changing program to see if that wouldn't fix the problem. I had also done the delete desktop.htt fix and so far nothing had worked.
Changing the screen resolution back and forth worked instantly, thanks.
Does anybody understand why this thing happened? In my case, my computer, which is normally very stable had crashed just before I had the problem.
Small rant: One of the things which I find annoying about Microsoft software is that when bad stuff happens there is often very little information provided in the error messages that would allow the problem to be fixed. Perhaps this is another example where this criticism is justified.