The preview for jpg, gif and html files are not shown in the display properties dialog box
In the display properties dialog box when you click the image in the background section in the desktop tab, the preview may not be shown properly.
This is because of some deleted or missing registry keys.
Open the run dialog box (start > run).
(Make sure that you are running as the administrator)
Now run the following commands in the run dialog box,
REGSVR32 /i SHIMGVW.DLL
REGSVR32 /i MSHTML.DLL
REGSVR32 /i SHELL32.DLL
The third one may not be needed at all costs.