Thanks heaps InsanesnakeShin igami. I did exactly what you said and it fixed the problem.

I have the exact same problem with my PC. It definitely has something to do with active desktop. How it started was I did a print screen of an image and pasted it into MS word to crop. I then copied the cropped image and then right clicked on the desktop and pasted it. This then came up with a message about active desktop and I before I could read it I accidentally hit enter. Ever since I did this my desktop icons have had the blue drop shadow on...