Boots to desktop, but no icons

Ok. I've been trying to figure this out for a while now, but I just can't get anywhere. md5 is good. Burn was done slow and verified with Nero. CD passes testcd.

When I run the normal boot-up with no cheat codes, everything works fine and it boots to the GUI desktop and the mouse cursor works, but then nothing else happens. I'm stuck at the desktop with a moving mouse, a background picture, and no icons.

I tried the failsafe command and it did boot OK. So, can anyone help me figure out how to get this working outside of failsafe? I can't figure out what could be causing the boot to hang at the desktop.

I have this exact same issue when trying to boot Knoppix 5.0.1 liveCD on a Dell Latitude D620
Background loads, mouse loads, mouse moves.
No Icons, no taskbar, no key combinations work to bring up a shell or another menu or anything.

Any thoughts on what else to do would be appreciated.