first... disable active desktop completely... if you are using a jpeg as your wallpaper you will need to change it to a bitmap so you can use it again
technical tidbit: bitmap is the only image format the windows desktop natively supports... jpeg was added by grafting internet explorer/active desktop over the exsisting desktop... they call it 'lazy programming' or 'a bad hack' in many circles...
now open regedit (start > run > regedit > ok) and go to "HKEY_CURRENT_USER\Software\Microsoft\Windows\CurrentVersion\Policies\Explorer"
in the "Explorer" folder there should be a key that says 'NoDesktop' ... if it is there double click and change the '0' to a '1'
if "NoDesktop" is -not- there create it by right clicking and selecting 'new > DWORD Value' and name it "NoDesktop" (no quotes and it is Case Sensitive!!) and give it a value of "1"
now relogin.... make sure you changed your jpeg wallpaper to a bmp or active desktop will try (and fail) to start again... (make sure it stays turned off!!)
i must admit the pro to this is more free memory and no possible chance that you will see the active desktop recovery message ever again and, of course, your icons will be hidden.... but the cons are you can no longer right click the desktop to get to the 'display properties' dialog... you will have to go through the control panel to get to it... and you can only use bitmap format wallpaper images...
the easy fix for the jpeg problem; open the image in internet explorer and right click > save as ... when you see the save dialog change the filetype from jpeg to bmp and save it... its that simple...
standard disclaimer of 'you break it im not to be held responsible' applies to this... you do this at your own risk....