Thx for the input. Tried it, it successfully ran, rebooted, no change.
Thoughts:
1. System icons not effected, just my personal icons.
2. Tried creating a new desktop icon, immediately got a black square.
3. Removed and replaced an icon, black square.
4. Sys is win7sp1; nvidia gets in the display act with its overkill control panel - running a geforce 570 - checked its tweaks, nothing looks like it would matter.
5. Moved icons to second monitor, still black squares.
6. Right clicked the desktop, changed the size of the icons to extra large and NO black squares - attach 1.
Changed back to small icons, black squares - attach 2.
Changed to medium size icons, black squares.
Changed back to large icons, NO black squares.
I'm definitely stumped now
Jesferkicks