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I'm not asking if Windows recompresses images that are used for wallpaper, as it clearly does. I'm asking if there is any way to disable that somehow.
The wallpaper I'm trying to use has white text on black, which makes compression artifacts horribly visible, which is why I saved the image as a PNG. Because PNGs are lossless, there should be no lossy compression artifacts whatsoever. But as soon as I load up the wallpaper, there are all kinds of little dots around all the text.
Why is Windows 7 recompressing the wallpaper to (I assume) a JPG file stored somewhere? And why has this changed from previous Windows versions. I know for a fact XP doesn't do this. My laptop has XP and there are no artifacts loading the same PNG file, even under close examination of a screenshot of the desktop.
Thank you for any help!!
Edit: I should say that I am making this wallpaper from scratch, and saving to PNG. I'm not simply saving a JPG as a PNG, since obviously PNG won't magically erase compression artifacts.

I'm not sure exactly why M$ does not allow the image format to be retained when that is done, although, there's a speculation that this is to throttle resource abuse from folks who won't hesitate to use excessively large images as their desktop background.
A workaround to avoid loss of quality is to setup the image as your background via your browser: Open the PNG from IE & set it as the background -- from within the browser window -- by right-clicking on it.

That other post was not me.
Opening the image in Firefox, right clicking on it and selecting "Set As Desktop Background..." did the trick! Thanks!
Still seems odd to me that Windows 7 recompresses the images... If the resource abuse thing is indeed true, it would seem logical to me that there would be a setting for this instead of forcing it always. Then again, this IS M$ we're talking about here...

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