Trying to change desktop background. When browse selected desktop closes and reloads. Applets are lost. Anybody know what the problem could be? Now cannot change background to anything other than wallpaper.

Have the same problem over here. Unable to solve it so far.
I am thinking maybe some application can caused the problem.
I was uninstalling canola, quiver, kagu, etc but still the problem is there.
Also, I have problems with the file manager,when I try to see the pictures folder, then the file application closes immediately.
Seems to be a mistery...
All my hopes to OS2008

I have an image (aka jpeg) as my background image, it's pretty easy to do. Have you thought about flashing it? I was having some other problems and I reflashed it and it's like new.

Hope this helps.

I did have the same problem.. only that all editing of files or trying to use images as wallpaper made the explorer or image program to crash and desktop applets missing.

I just did a reflash with the same version of firmware and it is now fixed.