One of the features hiding in plain sight which many people do not realize is included with Windows 7 is the ability to easily hide all your desktop icons and gadgets. To do this, right click on an empty area of your desktop and go to the View menu and select either ‘Show desktop icons’ and/or ‘Show desktop gadgets’. As you can guess, to show them just select the same option.
The feature is very handy when, for example, you need to use your computer for a presentation. Since this is a simple checkbox option, you do not have to go through the hassle of altering or hiding your existing “workspace” for something temporary.

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I believe the ability to easily hide desktop icons in this fashion was also available in Windows XP.
It was.
Still, many people do not know about or use this function.
Nice, you can also add a blank icon and add alt+0173 as the name which will give you a transparent folder.