I've searched high and low on the internet and on here (hopefully I'm not repeating unknowingly) and I can't find an answer to my problem that works. The backgrounds for the icons on my desktop are blue. I've manually gone into settings and set it to be transparent, and it still never happens.   There's a basic picture attached. WELL it looks like that minus the icons I coloured over in paint.

My computer is running on Windows XP Pro Service pack 2. I dont' know what other information would be pertinent...

Any help would be great thanks.

Right CLICK on My Computer and choose properties
Go to the Advanced tab
Choose settings, under performance
Place a check in the second to last box in the visual effects tab (show drop shadows for icon LABELS on desktop)
Press OK on all the dialog boxes
Your icon backgrounds should now be transparentYes I had this happen b4 and did a clean install to fix it then I figured out what I did... just like Calum said EXCEPT I set mine to best performance so it automatically unchecked EVERTHING... its hard to imagine someone would be as irritated as me about such a little thing...LOL