I've been using Deskscapes for a month or so now, it works fine with all of my games except World in Conflict when it is in DirectX 10 mode. It doesn't seem to disable the windows wallpaper animations in DX10 mode (seems to work fine in 9) as such, is taking around 25% of my fps off.
I'm running Vista business 32bit, newest version of WIC and Nvidia graphics drivers 177.83 (on an 8800gts 640Mb).