I had this same problems a couple of years back - cannot remember what I had to do to rectify it - if I remember I will get back. Meanwhile check if Cleartype is switched on.
remembered about this thread today.. don’t ask me why or how
i think i found the window control which dies the blend and background for icons.
go to mycomputer->right click->properties->advanced->performance
and check use drop shadows for icon labels on desktop
anyway i did this tonight after formatting. Mabe it may help some new guy