1. Open Run box and type %USERPROFILE%\AppData\Roaming\Microsoft\Windows\Themes\
2. Delete the TranscodedWallpaper.jpg file (that is a hidden file), then try to change your background again.
Method B
1. Type regedit in RUN dialog box and press Enter. Now go to following keys one by one:
HKEY_CURRENT_USER\Software\Microsoft\Windows\CurrentVersion\Policies
HKEY_LOCAL_MACHINE\Software\Microsoft\Windows\CurrentVersion\Policies
HKEY_USERS\.Default\Software\Microsoft\Windows\CurrentVersion\Policies
2. Under these keys, if you see "ActiveDesktop" key, delete it.
Method C
1. Click here to download ".reg" file to change registry key to allow all users to change desktop background
Sources:
- http://social.technet.microsoft.com/Forums/en-US/w7itproui/thread/ab8e5a85-a2e5-45e4-bbb8-fbdb7d9c15bd/
- http://www.askvg.com/solution-cannot-change-desktop-wallpaper-in-windows/
- http://www.sevenforums.com/tutorials/62038-desktop-background-allow-prevent-changing.html