Tony,
Let's experiment, a moment...
See that Windows7 logo screen choice, 1st one under Aero Themes? Select that. &, now, (next) see what happens when you select Frost w/ Transparency Enabled.
Also, you really should have a Screen Saver going.
That 2nd shot you show of Windows Color & Appearance... that you shouldn't have & we are not interested in it. If, you get that, means Aero is not being used & that's why you're not getting the results you seek. Anyway, try what I suggested @ the beginning of this note.
Maybe, you won't want to use that 'wallpaper' permanently but, just indulge me for a moment... can be changed anytime later.
Drew
Lemme know.