Windows vista Desktop Background Problem

I am using Windows Vista Ultimate. When I select Desktop Background to choose a background, the pictures show as if in very low resolution in some cases or otherwise, they are invisible. If I select any pictures, the desktop background is black.
When I open any folder, the pictures look as if they are in very low resolution as well. when I change the view, they appear normal. But I still get a black background. however, Windows DreamScene Content works fine. So it seems. Any Ideas how to fix it?