E6400, vista taskbar issue looks easy but I cannot figure out. Somebody please help

I have E6400 with Vista Ultimate.

it's really frustrating me. When I download/save something to desktop, Windows will find an area to save on the desktop. However, I recently noticed that Vista sometimes save the file in the very bottom of the desktop and behind the taskbar. So the file is hidden behind taskbar. From my understanding, taskbar must be on TOP of everything. See attachment so you guys can understand better.

File: 1.JPG
I just saved a text file on the desktop. However, when I look at my desktop, I cannot find that file, however, when you searched it, it is in the desktop.

File: 2.JPG
After I lower the taskbar I can see some part of the icon image hidden behind taskbar. This is not supposed to happen.

I have tried to do "Auto Arrange" and supposedly vista must place the icon anywhere, but behind the taskbar.

When I move my taskbar, my desktop icons are able to hide behind them -- even when i lock to taskbar. Resizing my desktop taskbar does not move the desktop icons automatically. All of my other computers automatically push the icons so they don't hide. Any idea why this happens? I cannot figure out why, if somebody can help, please let me know.

 

Do you have the taskbar set to auto hide?

 

Also try to enable the "auto arrange" option.

 

I have set Auto Arrange, Uncheck hide taskbar and still the problem persists.

 

You already posted this in Windows OS and Software. Please do not cross post.

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