Windows 7: windows desktop manager stopped working

I have a friends computer running windows 7 that comes up with "windows desktop manager stopped working" each time the computer is started. Another issue, which could be related is when you attempt to open a photo it says the .dll file for the program to view photos is gone(can't remember the exact error and t he computer isn't in front of me right this moment).

I did the following after Google'ing the issue with no luck on fixing the issue...

I ran a few different virus scans to make sure it wasn't infected, which they all came back clean.

I ran CCleaner to clean all the temp files along with running the registry fixer that it has built in.

I have the video card to the most up to date driver.

Bios is also up to date.

I booted into safe mode to see if the photos would be view able in there and they were not. Came up with same error as in normal mode.

I turned off DWM.exe from starting with startup.

I attempted to replace DWM.exe with a clean version.

I ran sfc /scannow. It said it found errors but could not fix them. I looked through the CBS log that was generated from the scan, but wasn't too sure what to look for on it.

I also ran the windows 7 start up repair from the disc which didn't solve the issue.

Last few things I tested/noticed today:
I went through MSConfig and set the computer up for "Clean Boot" and it still started with the error. That was with all non microsoft services and startups disabled.

I removed the video card(GTX560) and booted using the onboard video and the error didn't come up. So it has something to do with the video card/drivers. Is it possible the video card itself has gone bad but just to the point of throwing that error each time?

The failed sfc scan is probably the most telling.
You have damage to core windows files.
The easiest fix is probably a repair install since you can still boot.
Repair Install

Just to confirm, by doing the repair install I won't lose any programs or have to reinstall them such as games he installed...right?

No it shouldn't break any programs or installed software, it also will not remove any personal files.
The goal of the repair install is to return windows itself back to default.
If he is using any customized themes or visual styles, they will be lost along with things like folder location/size data. All that is easily put back just by opening a window and sizing it the way you want it though.
that would be about the worst of it though.

Awesome, I will give it a shot and let you know. Will this correct an issue he has with the recycling bin not emptying like it should? Even running disk cleanup it just sits at the scanning recycling bin and doesn't ever get past it.

double post

Assuming they are not caused by errant registry settings yes.
If it doesn't fix it we'll be pretty sure where the problem is though.
In general repair install solves all windows based issues, and recycle bin is part of windows.

That worked perfectly, he will be grateful. Thanks!

Good, could you do me a little favor and mark the thread solved? Should be at the top of the page with your first post.