There seems to be an issue with wallpaper changers. If a wallpaper changer updates a single file to contain a different wallpaper, like the Windows XP power toy wallpapertoy.exe, Fences does not update its desktop image cache. There is something regarding desktop image caching in the DesktopDock.dll.
The background image does update infrequently, but I am not sure what causes it to update, it could be just a long regular interval, I have not timed it.
I think the Desktop Image Cache should be updated more frequently, or there should a registry setting or GUI setting to set a frequency for desktop background cache updates.