Interesting – my work machine, a Windows 7 64 bit box, suddenly stopped auto-refreshing the desktop. Delete something off the desktop, and its icon remained until you right clicked and chose Refresh. Save something to the desktop, and it wouldn’t appear until you did the same. A co-worker had the same issue and, after some serious Googling, found the culprit.
Uninstall Teracopy, and viola! Desktop behaves. Too bad, as I love me some Teracopy. I’m currently test driving the alternative SuperCopier, which is uglier than Tera but so far works well and doesn’t fark up the refresh.