Hello Mobusteach, welcome to the Seven Forums.
Desktop is a subfolder in C:\Users\User_Name
. Windows 7 does not create user folders when a new user account is created, instead they are only created when logging on to a new account first time. When this happens, user folders (inclusive Desktop) are created. That's why you'll see this when logging on to a new user account first time: Attachment 80842
It simply tells you to wait while the necessary folders are created, bringing you finally to desktop, showing the part of the desktop that all users share. So depending on how much apps and software have already been installed to all users, it can be a very basic one with only a shortcut or two, or already filled with shortcuts.
In other words, a new user starts with a personal desktop showing only those elements installed to all users. Desktop preparation only occurs once, if you get that later there's something wrong on your system. To help us to find out what, please answer the questions Rich asked here above, and give us as much additional information as possible.