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I have the same problem as well with the washed out backdrops.
Its when you go to
Start -> Settings -> Today ->
In this menu there is an option to "Use this picture s the background" When you check that box you get a brouse button and you choose the picture.
No matter what picture I choose, it gets washed out and looks horrible. I have not yet had the chance to use the theme generator from Microsoft but I might have to if this option doesnt work properly.
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