Wallpaper WON'T change - not CAN'T.

There's a subtle difference with my predicament.

I'm not unable to change my wallpaper, it does change, but it's as if
it lies 'underneath' my current wallpaper, only to be seen once i log
off and log back in, or restart the computer.

I've tried enabling/disabling my desktop (i think?).

I'm running windows xp.

The computer appears to 'work' when i click OK or apply to change the
wallpaper, but no change is seen. Once i log off or restart the
computer, the new wallpaper has is seen. If i want to change it
again, i have to repeat the process.
Simply clicking refresh on the desktop does not solve this.

I downloaded the SmitFraudFix and it seems to work, and i will be able
to change the wallpaper with instant results, but after i reboot, i'll
have to run smitfraudfix again to change my wallpaper. What's going
on?

I hope with the knowledge of what SmitFraudFix does physically to
files, someone can help. I read that smitfraud generates a warning
message about an infection on your system in the form of a wallpaper
(?) and urges you to buy corrupt software or something, but i have no
such messages. there appears to be absolutely no problems with my
computer, other than the wallpaper not changing.

Please help.