Right click on your desktop, go to "personalization" and desktop background. You should have 3 options listed at the bottom. Which option is selected? I recommend the last option (centered).
However, there could be more issues. Try the above and I will go into some detail.
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including some recommended options. The best option is to us photo gallery to adjust the scale of your image to match that of your desktop resolution before setting it as the wallpaper.
The Background on Backgrounds
There are actually several places in the user interface where you can set your desktop background.
The first is the desktop background control panel. The control panel lets you choose a BMP or JPEG image for the background, and also lets you choose how the image will be positioned on the screen. A lot of these options are meant to support using small images as desktop backgrounds, and aren’t really relevant for people setting their background to a full-screen photograph. Three position types are supported:
* Fit to Screen – the image is scaled to be the same size of the screen. If the image is a different aspect ratio than the screen, the image will be squashed or stretched to fit.
* Tile – the image is repeated at its native resolution as many times as needed to cover the monitor. So, if your image is 160x120 and your screen is 1600x1200, you will get ten copies of the image across and 10 down.
* Center – the image is displayed at its native resolution in the center of the screen. If the image is larger than the screen, it will crop. If it is smaller than the screen, the extra area will be filled in with the background color.
The second way is to right-click on an image in the explorer or Photo Gallery and choose “Set as Desktop Background”. This will do a good job of scaling the picture proportionally to fit the screen, making it bigger or smaller if need be. Rather than squashing or stretching it, it will preserve the aspect ratio, including cropping the picture slightly or adding a border.
The third way is from IE. You can find an image on the Internet, right click on it, and choose “Set as Background”. The image will use whatever position type is currently set in the control panel, fitting, tiling, or centering as appropriate.
The Dirty Details
Although these look similar, they are in fact not the same. The control panel applet works by directly setting a JPEG or BMP image. The Photo Gallery/Explorer approach works by making a new JPEG image that is pre-scaled to be the size of your monitor. And IE makes a new BMP the size of the source image. So why does this matter?
Well - support for JPEG wallpapers is a new feature in Vista. In previous versions of Windows, only BMP images could be used for wallpapers. Using JPEGs for wallpapers is a great improvement. A full-screen BMP image is several megabytes, and can even affect other performance enhancements like SuperFetch. JPEGs, being compressed, are much smaller.
But there is a problem with what could be pure JPEG goodness: the low-level code that draws the wallpapers was using a simple linear interpolation algorithm to scale them. This meant that JPEG wallpaper images that were not the exact resolution of your display would have noticeable scaling artifacts. This was a regression from XP, because XP always used BMPs. Even worse, users would only notice this problem when using the new control panel for setting the background. If they used the explorer or Windows Photo Gallery, a new pre-scaled JPEG would be created using a high-quality scaling algorithm, and that image would be rendered unscaled by the desktop code. And if the user set the desktop from IE, IE would create a Bitmap, which would scale properly just like in XP.
When Vista goes out, you can have the best of both worlds – high performance JPEGs and proper scaling. Remember that using Windows Photo Gallery is still a good way to set wallpapers if you want to take advantage of their cropping and scaling options and you remember to re-do it if you change resolutions.