OK, when I switch to a paticular wallpaper the text underneath the icons on my desktop stop being transparent (see screenshot above). I do not have this problem with any of my other wallpaper; I think it may have something to do with the backround's colour, but I'm not sure. I have searched the forums and tried the solutions posted there, but none of them really work. Thanks for your help 
Some PNGs will do that when you use them as wp's =\ . I have no idea why though
Control Panel -> System -> Advanced tab -> Preformance -> Setting -> Check the "Use shadows on labels on Desktop" (second from bottom). But you probably tried that huh?
have u tried converting it to a jpeg or bitmap yet?
I took thefunky_monkey's advice, and re-saved it as a .jpg, and it worked! Thanks everyone for your help - you really are great
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