These are the settings we have in group policy for changing the background:
User Configuration -> Policies -> Administrative Templates ->Control Panel/Personalization
Code:
Prevent changing desktop background - Enabled
User Configuration -> Policies -> Administrative Templates -> Desktop/Desktop
Code:
Allow only bitmapped wallpaper - Disabled
Desktop Wallpaper - Enabled
Wallpaper Name: <PATH TO YOUR BACKGROUND IMAGE.JPG>
Wallpaper Style: Stretch
Disable Active Desktop - Disabled
Disable all items - Enabled
Enable Active Desktop - Enabled
Prohibit adding items - Enabled
Prohibit changes - Enabled
Prohibit closing items - Enabled
Prohibit deleting items - Enabled
Prohibit editing items - Enabled
We also have the following set:
Computer Configuration -> Policies -> Administrative Templates -> System/Group Policy
Code:
User Group Policy loopback processing mode - Enabled
Mode: Merge
Hope that helps