delete the "Settings" value here;
HKEY_CURRENT_USER\Software\Microsoft\Windows\CurrentVersion\Explorer\StuckRects
delete all the junk inside here;
HKEY_CURRENT_USER\Software\Microsoft\Windows\CurrentVersion\Explorer\StreamMRU
delete the entry here;
HKEY_CURRENT_USER\Software\Microsoft\Windows\CurrentVersion\Explorer\DeskView
StuckRects should clear it up hopefully, and you may want to Export the other 2 keys first, but really not neccessary
Got User Profiles enabled on the Box?
If so, Delve into the HKEY_USERS\<profilename> key as well
Check ALL the subkeys beneath \Policies (Explorer, System, Active Desktop, Network) that PAndersen posted
thinking a munged "NoChangeDesktop" or similar setting restriction - if you have no restrictions, you shouldn't have any entries under these subkeys
there are many restrictions that can be placed to disable any changes, or atleast not "save" the changes ("NoSaveSettings" for ex)
Also here
HKEY_CURRENT_USER\Software\Policies\Microsoft\Internet Explorer\Restrictions
or
HKEY_USERS\.Default\Software\Policies\Microsoft\Internet Explorer\Restrictions
have you stretched the whole taskbar yet? (when the pointer turns into a [<->] double arrow - drag the taskbar to make it bigger )
TT4U
Notification:
These are just my thoughts....and should be carefully measured against other opinions.
Backup All Important Data/Docs