Rich, I don't feel I'm the one to solve your prob. You're lightyears ahead of me when it comes to experience. But, just to let you know, for what it's worth, I've been running Logitech's cordless Mouseware and their keyboards and mice for years, now, and no prob. with their stuff other than mice eating batteries in the older versions.
I don't use Active Desktop as it gave me probs in 2002, and I seem to get along well without it. WIN XP PRO< SP2, P4 1.4 proc, 512 RAMBUS RAM, ATI X700PRO 256 video, SB Audigy 1st version 5.1, Samsung SyncMaster 910 MP 1280 X 1024.
This is the place to get answers, so I'll get out of the way and let 'em come. Luck to ya. Thanks for all the cursors; still stuck on 'em for yrs, now.   

WWW Link

thanks yrag.. I tried that download. Still showing the error dialog, we'll see if I still freeze up...

Any other suggestions?

You can try this....it will fix it or do nothing, so give it a go.

Download and save Cleandesktop to your computer from this link: http://www.thespykiller.co.uk/files/cleandesktop.exe and double click on the cleandesktop.exe

It will automatically extract to c:\desktopclean where it needs to be to run and will automatically run the cleandesktop.vbs script

If it doesn't open then go to c:\desktopclean and double click on the cleandesktop.vbs.

If you have script blocking enabled you will get a warning about a malicious script wanting to run. Allow this script to run. It is not malicious.

If you get a message when you first run it "Can not find script file *.*" just double click the cleandesktop.vbs script again.

It will then kill Explorer. You will lose your taskbar and desktop. It will repair the registry entries returning your normal desktop and context menu functions.

It will restart Explorer.

well, I get a 404 not found every time I try to go to that link...

ok, it finally went there... gonna try this out and see...

that didn't do it... froze again right after I rebooted and tried to come back here... :/ this sucks...

hey i get that error Internet Explorer Script Error it pops up billions of times all at once. i don't freeze up tho it takes a million clicks to go away even after a recent reformat it came back its annoying and i recall this all starting right after updating to Internet Explorer 7. it really loves to pop up on me when logging on to another user Account it just goes MAD! and i also get that Desktop Recovery screen that when i click repair or whatever then what happens that message pops up AGAIN!

the odd thing is, the error only comes up when I try to recover my active desktop... as far as the freezing, it shouldn't really have anything to do with IE... I use firefox!