Mysterious gray square outlines on certain desktop icons?

Posted by user74757 on Super User See other posts from Super User or by user74757
Published on 2011-11-11T06:50:59Z Indexed on 2012/10/06 3:40 UTC
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Recently, my hand slipped on my mouse/keyboard and I accidentally increased the icon size. After resetting it and fixing them, I noticed these incredibly annoying small gray outlines around only certain desktop icons.

I have one third party program called 'Desktop Restore' that I use to save and restore icon layouts, but I have no reason to believe that it should have anything to do with it.

My question is: Is this something in Windows 7? If so, what is it there for and how can I turn it off?

Killing explorer.exe and restarting it doesn't fix the problem, not even rebooting...

The gray squares of death...

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