There are a few reasons as to why you have desktop icons without transparency.
Your desktop background is a transparent or animated GIF image; you have placed Web content on the desktop; or you have chosen to lock Web content on the desktop. You can check for and correct all three in the Display Properties dialog, invoked by right-clicking on the desktop and choosing Properties.
First click the Desktop tab, select one of the default Windows background images, and click Apply.
Next, click the Customize Desktop button and click the Web tab in the resulting Desktop Items dialog box. If there are any checked items in the Web pages list, uncheck them. Also uncheck the Lock desktop items checkbox.
Click OK, and OK again.
Your desktop icons should now have a transparent background for their labels, with a drop-shadow effect.
I think it has something to do in the registry, however I could be wrong. You could try something like Microsoft Tweak UI, then in Tweak UI do the following:
1. Click Repair, select Rebuild Icons.
2. Click the Repair Now button. You may have to click it twice.
3. Reboot.
If that doesn't work start your computer in Safe Mode which will rebuild the icons at a lower resolution, and then reboot into Normal Mode to have them rebuilt again at a higher resolution.
EDIT:
DjLizard's Dial-a-Fix may actually be your best first choice. In Dial-a-Fix do the following:
I think it has something to do in the registry, however I could be wrong. You could try something like Microsoft Tweak UI, then in Tweak UI do the following:
1. Click Repair, select Rebuild Icons.
2. Click the Repair Now button. You may have to click it twice.
3. Reboot.
If that doesn't work start your computer in Safe Mode which will rebuild the icons at a lower resolution, and then reboot into Normal Mode to have them rebuilt again at a higher resolution.
Windows XP has the ability to display desktop icon labels with a transparent background and drop-shadow effect. When you have a nice picture for a desktop background, this looks a lot better than having the labels backed by blocky rectangles of the default desktop color. Sometimes, though, even when you have the system configured to use drop shadows, you still get those ugly rectangles. This occurs when your configuration requires use of a feature called Active Desktop. In earlier versions of Windows, you could turn this feature on and off; in Windows XP, it's enabled automatically when needed. To turn it off, you need to find out why it got turned on.
He's actually referring to the icon labels themselves; not the icons. I've seen this issue here on CCleaner before (but was unable to locate the old post).
He's actually referring to the icon labels themselves; not the icons. I've seen this issue here on CCleaner before (but was unable to locate the old post).
Ahh, I'm thinking of something else then?
I have seen where some icon flushers namely RegSeeker remove the ability to have Alpha-blended icons display correctly.
here's another thing what you can try in Windows XP,if your icons are messed up; delete file iconcache.db. it's hidden file in C:\Documents and Settings\<user>\Local Settings\Application Data folder.
I had the same problem, i did everything i read in forums but nothing happened...
The first time i solved this problem i had to delete my user's profile completely and had windows to recreate it... it worked fine
Eventualy (i'm talking about 2 or 3 days), the f***ing rectangles came back and this time really pissed my off 'couse i went through hell reconfiguring all my profile. I downloaded Dial-a-Fix and it encountered with a problem... i changed this registry value to 0, restarted and it worked