This is for XP but probably applies to Vista:
Four things are required for transparent icon backgrounds:
1.Control Panel-System-Advanced-Performance Settings.
Check "Use drop shadows for icon labels on the desktop" on the Visual
Effects tab.
2.Right-click on Desktop - "Arrange Icons by" and ensure Lock Web
items is cleared.
3.Transparency will not work if you have web content on your desktop,
Control Panel - Display Properties - Desktop tab - Customize Desktop -
Web tab. Clear all check boxes.
4. Ensure the Wallpaper is an image file not HTML.
....Alan
