problem with desktop wallpaper

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I cannot change my desktop picture. Right now I have a picture and it is stretched, not centered like I used to have it. It will not let me change it. When I go to (desktop Properties) to try to change it; it will not let me select a picture at all, but it will let me change the background color. When I go to one of my pictures and I right click and select set as desktop background, it will still not show it. Any ideas on how to fix this. Any advice will be welcome.

I have WinXP media center edition, in a Dell dimension. I normally use firefox and haven't had a problem w pop ups in a long time, but recently I've been browsing w firefox and a internet explorer window pops up trying to sell me spyware removal tools (ironic, huh?) Both of these problems appeared at the same time, I don't know if they are related. Thanks!
 
use kaspersky net secuirty trial scan and remove usally kaspersky cleans out everything. or try trend micro web scan which works pretty good.
 
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