Terry Pinnell wrote:

This illustration is hopefully self-explanatory:

https://dl.dropboxusercontent.com/u/...nailPuzzle.jpg

I can't get my mind around this inconsistency and it's making me
uncertain what files I'm working with!

Maybe it has to do with how you configured Windows to show (or not show)
background colors for icons. Remember that what you see on the desktop
is being presented by Windows Explorer. The explorer.exe process is the
desktop manager and why killing all instances of it results in losing
the desktop.

http://www.tech-recipes.com/rx/751/x...n-the-desktop/
http://ihacking.wordpress.com/2007/0...xp-if-its-not/

The option is badly worded. It appears it merely has Windows Explorer
ignore whatever background color is specified in the icon image file and
instead use the background color configured for Windows Explorer.

See if toggling this lets you see the background rather than having
Windows Explorer ignore it.