The first configuration is in the CCSM tool. You will find this tool in the System > Preferences > CompizConfig Settings Manager. When you fire up that tool enter “wallpaper” in the search field. The Wallpaper settings is listing under Utility. When you see it listed click on it to open up the options.
... there are only two sections to configure. The first is to click the checkbox to enable the Wallpaper for Compiz. The second is to add Wallpaper(s) by clicking the New button, navigating to where you have your images saved, selecting your wallpaper, select your Fill Type (do you want the image centered, scaled, etc), and click Close.
Hit <Alt>F2 and type gconf-editor to open up this tool. You need to navigate to Apps > Nautilus > Preferences. Scroll down until you see the show_desktop entry. If that checkbox is checked, uncheck it and close the tool.
