TechSpot posted a guide about changing the wallpaper in Windows 7 Starter

Few people would argue that Windows 7 is a great step forward for the platform -- but those folks probably don't use the Starter edition. Anyone who is stuck with it will know that this entry-level variant of Microsoft's operating system is swathed in red tape, and is a real bummer to use beyond browsing the Web or checking your email.

Aimed at netbooks and other proprietary systems, it's the most diluted version of Windows 7 with many basic features missing. Among them are the Aero Glass interface, fast user switching, DVD playback, multi-display support, as well as personalization options, such as the ability to change desktop backgrounds, window colors, or sound schemes.

Most of the excluded features won't really hinder the use of a netbook. After all, few ship with DVD drives or have multiple users anyway, but staring at a bright blue Windows logo for the lifespan of the system is torture. Hell, even Windows 3.1 lets you set a desktop background, and thanks to a number of free utilities, so will Windows 7 Starter.

Tech Tip: Change Your Wallpaper on Windows 7 Starter