I have been having the exact same problem, and for me it started right after updating to the WB 4.20a[b].002 build through SDC. I have tried the same things as Esmond and cannot seem to fix it. I have rolled back to the last non-beta release, tried all kinds of combinations of uninstalling and reinstalling, and tried the suggestions here of dropshadow and Windows FX, and no matter what I do, I can't get rid of that ugly box behind the text. Even worse, the transparency masks for many of my icons are failing, and rebuilding icon cache only helps a few of them. I tried going through Stardock support using the newsgroups, but not getting any useful answers so far.
What I have done in the meantime, is to use Icon X as part of my Desktop X theme. The transparent text problem and the icon mask problem disappeared. I haven't given up on trying to solve the problem, but so far no luck after fighting it for a month.
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