Another thing I would like to know is if you reset Fences to a default layout:

Does it reproduce?
Second, and while still in this default layout, create a 'Temp' folder on the desktop. If you take all the non-Windows icons \ documents (so no Recycle bin and such) on your desktop and 'move' them to this temp folder, does it reproduce?
If it does not reproduce, 'move' that 'temp' folder to \Documents in Windows explorer. Going back to the desktop, create a Fences 'folder portal' to it:

Does it reproduce?
If not, we are in better shape... You can likely see where I am going here, something on the desktop might be making Fences go nuts.
If you want to proceed like this (all my Fences on one of my PCs are Folder Portals only), go to the 'temp' folder and rename it 'DesktopFences'. In it, create new folders that would be the same as any Fence name you had, 'Programs', 'Games', etc. Start moving icons and documents from the root 'DesktopFences' folder to the new folders you created - Program ones in 'Programs', etc.
Then go back to the desktop and create new individual Folder Portals for them.
Let us know.
Sean Drohan
Stardock Product Lifecycle Manager