The links mentioned here didn't work for me. The 45575 mentioned in this thread did not work. I suspect it was because my laptop has Windows 7, 64-bit. Here's the procedure to use to make sure you install the correct software to fix this issue, no matter which version of Windows 7 you have:
Make sure you find out whether or not your Windows 7 is 64-bit or 32-bit before going to
www.hp.com. To find out, click on the "Start" icon (the icon with the Windows Logo that is almost always at the bottom-left of your screen). Once you click on the "Start" icon, right-click on "Computer" from the items that come up. Click "Properties" and look at what it says for the "System Type".
Go to
www.hp.com.
Click "Support and Drivers".
Bullet "Download Drivers and Software".
At this point, you will have to know the product. HP will admit that the product info they need will NOT always be visible anywhere on the laptop. Click "Start Detection" and go through what it says on the screen in order to find out what your product is and then return to "Step 2" (by clicking on the "Back" arrow) to type in the information specific to your HP laptop.
After you have specified the product information that HP will accept, you will be asked for the Operating System. Specify whether your Windows 7 is 64-bit or 32-bit.
Go through the available downloads until you see the download for the Wallpaper Picture Position Enabler (it's under the available software downloads).
The file that worked for my laptop was 45990, not the 45575 mentioned in other replies to this thread.
I saved "sp45990.exe" to a folder I created on my C: drive called "Downloads".
When it was saved there, I minimized the Internet connection, went into my "C:\Downloads", and double-clicked on "sp45990".
"Wallpaper Picture Enabler for Windows 7 Install Shield Wizard" came up. I clicked "Next".
I bulleted "I accept the terms of the license agreement" when the license agreement came up. I then clicked "Next".
"Welcome..." came up. I clicked "Next".
"Select Installation Folder" came up. "C:\SwSetup\SP45990" was already there. I also told it to install the picture enabler for everyone, but this isn't necessary (If you are going to be the only user, you can leave it at the default (yourself)). I clicked "Next".
"Confirm Installation" came up. I clicked "Next".
"Installation Complete" came up in a few seconds. I clicked "Close".
After that, I was able to use whatever I wanted as the desktop background and I could change it from "Stretch" to "Fit", "Center", or whatever I wanted. It worked.