"Live Wallpaper" is a flash/html wallpaper.
As of Microsoft's introduction of Windows Vista it is no longer an option.
Microsoft introduced their customers to "DreamScene" a video wallpaper, and the "Sidebar" in Vista as a replacement and improvement over the idea.
And with the release of Windows 7 they removed "DreamScene" due to resource and bug complaints and have not continued support and they changed the "Sidebar" into "Gadgets" so the user had more flexibility.
A few months ago after a couple of years trying to remove serious security vulnerabilities from the "Sidebar(inc. Gadgets)" system, they determined it was best to disable / no longer support this feature and have released hotfixes and notes on how to disable the system.
With the release of Windows 8 there has been no replacements.
If you enjoy DreamScene however and would like it in Windows 7, I know of 3 options; StarDock
- DreamScene Activator DreamScene Seven
- DreamScene Seven