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Windows XP Tips, Illustrations and registry edits
When you click a JPG, GIF image or a HTM file in the Display Properties Background tab listing, the preview may not be generated. Whereas .BMP preview might work fine. This happens due to missing registry keys, one related to HTML Thumbnails and the other related to HTML documents. Missing Active Desktop registration is another reason, but that causes the White screen behavior in the preview pane.
To resolve the problem, type the following commands in the Start, Run dialog:
REGSVR32 /i SHIMGVW.DLL
REGSVR32 /i MSHTML.DLL
Close and re-open the Display Properties dialog. If the problem persists, or if the Preview pane turns White when you select a Wallpaper, then run this command.
REGSVR32 /i SHELL32.DLL
Login as Administrator (or equivalent) to run the above commands. Restart Windows for the changes to take effect.