My friend’s computer was infected with a virus; well with some work I was able to clean his computer.  However, the virus somehow changed all his desktop shortcuts, in such a way that the text portion now has a white background.  Before the infection the text had no background color, just the desktop photo that he had installed.  I see how to change the background color of the text portion, but I can’t find a way to get rid of the background color all together.  (The way his computer was, and the way mine is).
How do I get rid of the background color behind the text portion of desktop shortcuts?

   How do you change the background color?  There should be something about making it transparent.

To change the background color.

Right click on the Desktop --> Properties --> Appearance Tab --> Advanced button.

I don’t see any option for none or transparent.

   OK.  Mine has a color set on it, yet the text background is transparent on my desktop.
   There is an answer to this, but I can't remember what it is.  Could it be that the Color quality setting on the Settings tab is too low?  What is yours?

I found the answer on Mark Salloway’s Windows XP Resource Center.

Make sure that “Lock Web items on desktop” is unchecked.  (Right click on desktop -->  “Arrange Icon By” )

1) Right Click on “My Computer”
2) Select “Properties”
3) Advanced tab
4) Setting Button under Performance
5) Select the “Custom” Radial
6) Check “Use Drop Shadows for Icon Labels on Desktop Icons”

(Read with Sarcasm) This was so intuitive; I don’t know how I missed it!  

Ray, thanks for your help, hopefully this will help someone esle.

Interesting.  I am glad you figured it out.  I never would have found that.