JSI Tip 1248. Desktop ICONS are messed up after installing SP4.

The following may help:

1. Right click a blank area of the desktop and click Properties.

2. On the Plus! tab, uncheck Show icons using all possible colors.

3. Click Apply.

4. From a CMD prompt, type:

     attrib -h %Systemroot%\ShellIconCache
     del /q /f %Systemroot%\ShellIconCache

5. Shutdown and restart Windows NT.

6. Enable Show icons using all possible colors.

7. Click Apply.

8. Shutdown and restart Windows NT.

You might also try tip 0084.