QUOTE (BenoitRen @ Jan 23 2008, 10:49 AM)

Don't do it! The Active Desktop 'update' will integrate IE4 into Windows 95 and slow down your PC. Convert the JPG files to BMP instead.
Applying the Desktop Update is really a matter of taste. I myself constantly use other features like the Quick Launch bar (my taskbar has two rows, one for shortcuts and other for the task buttons, because I hate a cluttered desktop). Also, if he said it used to work, it probably means he used to have it installed, so he's probably used to the slowdown.
You do have a valid point, though, and I myself disable the Active Desktop (JPEG/HTML wallpapers and Web Objects) per se, even on Win98/2K/XP, as it is, in my opinion, the most noticeable slowdown of the IE integration.
phillip1966: If you want a (relatively) quick way to apply a JPEG as a wallpaper without Active Desktop, open the file with Internet Explorer (if it is not the defalt handler, open an IE window and drag the file there), right-click the image and select "Set as Wallpaper". IE will conver the image to a bitmap file (%windir%\Internet Explorer Wallpaper.bmp) and apply this BMP file as your wallpaper.