This is a problem I noticed many months ago, but did not seriously look in to until just now.
I like to use the monthly Mozilla Foxkeh desktop wallpaper. Right now, I have the January 2011 wallpaper — this nice, large, lossless PNG. (By the way, the word that he is in the progress of writing is “火狐”, which literally means “fire fox.” How cool!)
Anyway, I noticed that there is crappy compression on the image shown on my desktop, particularly around the numbers that make of the calendar. This has been occurring in the wallpapers for past months as well. If I open up the PNG (that I told Windows to use!!) and zoom way in, the image is crystal clear. But on the desktop, it is junk. Take a look, I zoomed in on the “2011” at the top-left of the calendar. On the left is the data from the PNG as viewed in any decent graphics application, and on the right is what appears on my desktop.