FYI, I finally got this working but ONLY by connecting to a PC and manually renaming the file on the PC. Basically, the problem I was having was I'd have the following file name in the right place with absolute paths, etc but it wouldn't work.

"filename.desktop"

It seems that it should be ".filename.desktop" (notice the period at the start of the file name). Annoyingly, when I tried to rename the download from N900Wallpapers, the device wouldn't let me, saying that I couldn't name a file beginning with ".", I also received this message when trying to rename the file in File Manager.

Presumably, the file could be renamed with root access in X-Term, but I wouldn't have the first clue how to do that! So had to do it on my PC!

Hope this helps someone else.