Although I am unsure of Win7, but XP, there is a better & very easy way to change the wallpaper, which can be accessed without even navigating to the Registry, since the default path is:
C:\Documents and Settings\DIGIT\Local Settings\Application Data\Microsoft\Wallpaper1.bmp
Here you would see the file Wallpaper1.bmp, just replace this file with the one which you want everytime you want to change.
This is the easiest way I can conjure.
There is a neat trick. Always check the target location, which can help you overcome this long procedure.
Hope this helps.