Ahh. You have a 8800GTS.
We have had a number of reports of problems with Deskscapes and 8800GTS graphics cards when running video dreams. The most unusual thing is it is very specific to one series of card the 8800GTS and other boards made with the same chip. We do not get reports of this with ATI, intel or even other nvidia boards. Usually the report is from Vista / 7 users and the end result is what appears to be a system lockup, but it looks like on XP it just locks the only app using 3D (on Vista / 7 the DWM is also using 3D and so locks too)
We have reported it to nvidia and hopefully they will be able to resolve the problem.
Out of interest what is the version number of your video drivers?