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Group Policy issues with background and icon text background

I have recently enforced a policy to change peoples backgrounds to a specified background.
I enabled this in active desktop and specified a jpg file to use.
When users log in, the background appears, but then dissapears and then only re-appears at the top of the screen, prob about a 5th of the screen at the top is in the right colour, the rest is the specifed windows colour (default blue).

It will correct itself and all appear if the user licks on the background and clicks the f5 buton for refresh

Any ideas on that, strange i know.

Also, the icon text background colour is defaulting to whatever is the windows standard colour is (found in display poperties / desktop / color) but when i apply this manually without GP it is clear and so matches the background.  
I know its a small issue but it just looks awful.

Im using all windows xp clients and a windows 2003 dc
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I will test this later this week and let you know how it goes, i have a bigger crisis on my hands at the moment