I just had an attack of about 6 tray and slot loading iMacs all of which were doing the same thing. The students in the lab got on a kick to setting their background pattern to fade to another one every 5 seconds. Besides severely impacting the machine's performance, six of the users' accounts now would not allow access to the Desktop System Preference. The screen would change from the pref select to the Desktop pref, and before the pictures in the selected folder started drawing across the bottom, System Preferences would quit unexpectedly. All these machines were running Mac OS 10.2.8, and the crash would affect the user no matter which machine they used. (networked accounts, though I did not have them try a 10.3.9 machine)

The solution was to delete (home)/Library/Caches/Desktop/. Once this was deleted, the Desktop System Preference pane would load and work normally. (and thankfully, allow us to disable the every-5-seconds rotation!)