I just got a Dell Dimension 266 with the LX chipset running Windows 95. When I try to save something to the desktop, it doesn't show up there, although you can Find it and see it in Explorer. I formatted the hard drive, reinstalled Windows, and when I got it running, tried to save a notepad document to the desktop. It STILL didn't work. I have Windows 95 (an earlier version, I'm sure) at work and this feature runs like a champ. What's going on? Is it the software, or my computer?
It is in the Desktop directory in Explorer, also the C:\windows\desktop directory. It just doesn't show up on the desktop. Yes, when I create a new text file on the desktop, that works, but when I'm in an application (Notepad, Netscape, etc.) and save or download a file to Desktop, the icon for it won't appear until I restart. (Or until I CTRL-ALT-DELETE, Shut Down Explorer, Restart Explorer).
The file is ALWAYS THERE, it just doesn't actually show up on the desktop until I do something drastic. I can open it by typing the name (c:\windows\desktop\untitled.txt, for example), but it's not appearing on the desktop.
And yes, I tried Auto Arrange, Line up icons, etc., etc. It just won't show up short of a reboot.
When I create new text document, as you described, the text document stays there on reboot, no problem. I am working on this from home (no network), although the computer at work I'm comparing it to is on a network.