Windows Wallpaper Woes

After installing Windows 7 service pack 1 (build 7061), I inexplicably was unable to change the wallpaper, it allowed me to only change from one solid color to another.

I found a fix that worked for me, it involved simply opening the following folder and deleting the TranscodedWallpaper.jpg file contained within. 

%USERPROFILE%\AppData\Roaming\Microsoft\Windows\Themes\

Once I did this, I closed the Personalize screen and reopened it, and then I was able to once again change wallpaper to something considerably less drab than one of the various solid colors.