This issue could occur if there are any issues with the display adapter. Please follow the methods to fix the issue:

 

Method 1: Run the troubleshooters:

 

Open the Hardware and Devices troubleshooter

http://windows.microsoft.com/en-us/windows7/Open-the-Hardware-and-Devices-troubleshooter

 

Open the Display Quality troubleshooter

http://windows.microsoft.com/en-US/windows7/Open-the-Display-Quality-troubleshooter

 

Method 2: Run SFC scan in the computer

 

Use the System File Checker tool to troubleshoot missing or corrupted system files on Windows Vista or on Windows

http://support.microsoft.com/kb/929833

 

Method 3: Enable Desktop Window Manager

 

a. Click the Start in the bottom left-hand corner of your screen.

b. Type in: "Services.msc" (without the quotes) into the Start Search text box. If prompted by the UAC, provide a password or confirmation. Click Continue.

c. Scroll down until you locate the entry that is labeled: “Desktop Window Manager Session Manager

d. Right-click on this service. Select Start from the context menu.

e. Right click once again on the entry. Select Properties from the context menu.

f. Go to the “General tab.” Change the Start up Type to "Enabled." Click OK.

 

Links

http://answers.microsoft.com/en-us/windows/forum/windows_vista-performance/desktop-window-manager-stopped-working-and-was/d04ad39e-d6cc-4122-90cd-4b5b4739328b