Can't change desktop background

I've had this problem since I 1st got this refurbished PC (Windows 7 Home Premium, 64 bit). I thought the problem might sort itself out once all the updates were installed, but no luck.
When I try to change the background via Control Panel/Appearance & Personalisation/Change Desktop Background, the PC only responds to selections made in the "Solid Colours" folder. I can access other folders but clicking on the pictures in them has no effect.
When I right click on a picture in Windows Explorer and select "Set As Desktop Background" it also has no effect.
I can set a new background picture online using Firefox (it saves it to an obscure folder somewhere that I have forgotten the name of), but I really want to set up a slideshow of my own pictures.
When I change the Windows Theme, the desktop goes black, and the theme gets listed at the top of the "Personalisation" box as an unsaved theme under "My Themes". Ive tried both Aero and Basic themes.