A previous thread covers this aspect & may resolve your problem>
"All desktop icons missing from Windows XP SP2 unit after login":
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Question
No desktop icons - 'Show desktop icons' greyed out
On a Windows 2008 domain, only a single user on a Windows XP computer cannot see his desktop icons. Right clicking on the desktop, all options under 'Arrange desktop items' is greyed out. Other users that log in to this workstation can see the desktop icons as normal. I have confirmed there are no GPOs affecting this user or workstation to disallow desktop icons. Browsing to %userprofile%\desktop\ shows the items that should be on the desktop, and the user can access them as normal from there. I have used TweakUI to confirm that the desktop folder is directed to the correct place, and this location is local. Any ideas?
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by: ukitsmePosted on 2009-10-14 at 16:29:58ID: 25576189
Click Start, Run and type REGEDIT. Navigate to the following key
HKEY_CURRENT_USER \ Software \ Microsoft \ Windows \ CurrentVersion \ Policies \ Explorer
Double-click NoActiveDesktopChanges and set it to 0
Double-click NoActiveDesktop and set it to 0 (if exists)
Close Registry Editor and restart Windows.
To change the setting via Group Policy Editor for Windows XP Professional:
Click Start/Run and type GPEDIT.MSC
Navigate to this path:
User Configuration
=> Administrative Templates
=> Desktop
=> Active Desktop
Double Click on Prohibit Changes and set it to Not Configured
Double click on Disable Active Desktop and set it to Not Configured