It does not make much sense to have the prettiest background image if it is cluttered with shortcuts and other icons, especially the way windows handles them. Shortcuts come with an arrow in the icons and the background text that is displayed beneath the icons is not transparent. We are going to change this with a few short fixes.
We are going to remove the arrow of the shortcuts icons first. Hit Windows + R and type regedit. Navigate to HKEY_CLASSES_ROOT\LNKFILE and delete the entry IsShortcut in the left pane. Next do the same at HKEY_CLASSES_ROOT\PIFFILE, et voila the arrow is gone.
Making the desktop icons transparent is far easier. We are going to use the freeware Iconoid to do this. Start Iconoid after installation and click on disable drop shadows in the color tab if that button is available. The default setting is that the icon background is transparent which is exactly what we want. You might need to change the default text color as well if you are using backgrounds that have a similar color than the default font color.

Hide all icons on your desktop
Small Desktop Icons
Create Textless Desktop Icons and Shortcuts with Enhanced Context Menu
Well, I followed your instructions to delete the IsShortcut files in LNKFILE & PIFFILE, et voila…the arrows are still there! Hmmm… does W2K behave differently to XP?
can you please check if the entries are really deleted ?
Mine didn’t work but I guess it is because I am using the Vista Transformation Pack. The shortcut arrows are different then the regular XP ones.
Thanks anyway.
My mistake. Yes, they were deleted but I thought that refreshing the desktop would be enough. Restarting sorted it out. Thanks for the tip on Iconoid, too – very useful.
Oh wow I was wrong, restarting did work for me. Thanks!
I just discovered a problem with the registry edit – Hot Keys linked to the shortcut icons are lost. Any way to restore this?
sasas
Zed I’m not sure, did you try adding them again ?
Glad to see you giving Iconoid a mention, I’ve used it for ages and wouldn’t be without it now, personally my favorite feature is its ability to hide all desktop icon’s until the desktop is clicked.
Ok here comes the fun part, how can i get the arrows back if i want so? Anybody can help? Well it is nicer without them, but it is rather hard to see which is a shortcut and which is a folder :) .