Common Question:
How can you get a Windows 2003 Server to display desktop wallpaper when RDP'ing from an XP Client? Even trying it as the Administrator has the Background Wallpaper options greyed out in the RDP session. I've also checked the 'Show Desktop Background' box on the experience tab in the Remote Desktop Client.
Answer:
Try to change the policy (either local or group policy - depending whether your computer is part of domain or standalone).
The policy that you need to edit is under Computer Configuration -> Administrative Templates -> Windows Components -> Terminal Services. Here look for "Enforce Removal of Remote Desktop Wallpaper " and double click on this policy. Set the policy to disabled.
Now refresh the policy on your server and try to connect and set the wallpaper. GPUPDATE /FORCE will kick it into high gear but you'll still need to logoff/logon to see the results.
Note: enabling wallpaper on RDP connection may cause slower response and consumption of more resources on the server.
