Dotted Box around Desktop Icons

Click> Start.
Right-Click> Computer.
Click> Advanced System Settings (Left menu, bottom).
Click> Advanced Tab.
Click> Top Settings Box (Performance).
Click> Visual Effects Tab (should be selected already).
Deselect> Show translucent selection rectangle (Tick box/ Check box) REMOVE TICK.
Click> Apply.
Select> Show translucent selection rectangle (Tick box/ Check box) APPLY TICK.
Click> Apply.


PROBLEM SOLVED!!!

A restart fixes it for me. I have seen it happen a bit too.

Dan the Hitman said:

Click> Start.
Right-Click> Computer.
Click> Advanced System Settings (Left menu, bottom).
Click> Advanced Tab.
Click> Top Settings Box (Performance).
Click> Visual Effects Tab (should be selected already).
Deselect> Show translucent selection rectangle (Tick box/ Check box) REMOVE TICK.
Click> Apply.
Select> Show translucent selection rectangle (Tick box/ Check box) APPLY TICK.
Click> Apply.


PROBLEM SOLVED!!!

Been trolling through loads of threads on this subject without any joy, very frustrating to say the least. Thanks Dan the Hitman Your solution is the only one that has worked ( I rebooted after following the above method )

This isn't a problem that is always there but that people just don't notice it until one day they do. It's a problem that appears out of the blue and I'm not sure why but there is a way to fix it.
You need to delete your icon cache and restart your computer. To do this you need to go to folder options in the control panel and in the view tab you need to change the settings to show hidden files and folders. Once this is done, go to Users/ Your Username/AppData/local and locate the icon cache file. All you then have to do is delete it and restart your computer. Problem solved.
When this started happening with me I did a google search and this post was top of the list claiming to have solved the problem. Well this post didn't solve the problem until now. Hopefully when people google this problem and this post comes up, they really will have a solution to this annoying problem.

Just shows what an annoying bug this is 'cos restarting didn't solve the problem for me..

Greetings everyone. I know this is an old thread, but I found myself with the same problem as the OP today and accidentally just messing around I found a super fast and easy fix to the problem! So, I decided to register because of how simple of a fix this actually was. Just go to your desktop and press alt+escape. That will remove the dotted box outline caused by keyboard navigation. I hope this helps anyone else out there searching for an easy solution to this problem. Cheers!

PS: Make sure to click the desktop background before you press alt+escape to make sure you don't have any program in the background selected.