Hi Brink,
I tested this a better of late last night and this morning. Yes, I know the reg tweak for the right click desktop command to remove icons is the one you give and the one I posted in first of 2 tweaks. It's been like that since Win 95 I think?
Now the second command did not work like I expected. It took a few reboots to notice that it actually does the same thing as the Local Group Policy Editor to hide all desktop items. Basically it also disables right click context menu.
So what I thought might be the issue, is a conflict between user and machine. I applied a different reg tweak and I can say for sure after 10 reboots the issue has gone.
Here is the simple tweak. Paste in Note pad and save as HideDesktopIcons.reg
Code:
Windows Registry Editor Version 5.00
[HKEY_CURRENT_USER\Software\Microsoft\Windows\CurrentVersion\Explorer\Advanced]
"HideIcons"=dword:00000001
[HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows\CurrentVersion\Explorer\Advanced]
"HideIcons"=dword:00000001
Double click file. Reboot to apply.
It seems that this hack bugs when you log off. If you restart, it always works. I think this is the repro for the problem.
Even if this hack works, this still shows without a doubt that there is an issue with desktop icon settings.