I am not sure, how would I be able to tell that?

Right-click [My] Computer, Properties ... should tell you the version there.

I think someone here is checking with a current or ex Best Buy guy to see if we can get the demo mode disabled for you - if that is even the problem.

Otherwise, you could always reinstall to get it working.  Reinstalls with Windows 7 are very easy.

Did it come with Windows 7 Starter Edition?  Starter is a severely limited version of Windows 7 that does not include the ability to change the background.

You cant change your wallpaper on WINDOWS 7 Starter and Homebasic.

By default the Windows 7 Starter and Windows 7 Home Basic editions do not include the Personalization features such as change desktop background, Desktop Slideshow, Screen Saver, and Windows Color and Appearance.

You should be able to do F8 factory Restore to remove any "Demo" mode installed.

www.bestbuy.com/.../3810198.p This is the one that I bought. It says "•Windows 7 Home Premium 64-bit"

My screen saver works, with the pictures that are on my computer...I don't have homebasic or the starter. I have Home Premium. I can also change the color of the background but it only lets me choose the solid colors...no theme's but there is an option to change the themes and put pictures on there.

We have a Geek Squad person on the forum user staff.  I've tried to get him to respond to this, but he aparently hasn't logged into the forum lately.

RIGHT click in an empty space on the desktop (screen) and then click on "Personalize".  You should have options that include pictures to select from.  Or if you have pictures or download a picture to be used for the wallpaper, RIGHT click on the thumbnail picture icon and "Set as desktop background" should be an option.

I actually found the answer, from a different sight. I had to put in a code, it came up with a "corrupted" picture. I deleted it and it works just fine now.

thanks for all the help though

It appears as if you have two choices:

1. Take it to the store and have them "fix" it for NO CHARGE, or

2. Reinstall from scratch (you "might" be able to use F8 to restore to factory condition ... start tapping F8 once or twice per second as soon as you see the F2/F12 prompts - if you see the Windows logo, it is too late - then select Repair Your Computer).

This seems to be a common issue with Windows 7.
I am posting this in case others have the same issue.

Can't change the Background Wallpaper in Windows 7

This has worked for some people.  Maybe it will work for you.

Click the Start button and type the follow command in the search box and hit enter. 
%USERPROFILE%\AppData\Roaming\Microsoft\Windows\Theme

Now delete the file TranscodedWallpaper.jpg

If that doesn't work, try this.

Click the Start button and type the follow command in the search box and hit enter. 
Ease of Access
 
Click on Make the computer easier to see
 Uncheck Remove background images (where available)