I'll try not to make a habit of replying to my own posts, but I was talking about a multi-monitor setup whilst the GP was probably refering to virtual desktops.

Compiz's wallpaper plugin can put different wallpapers on different virtual desktops, but currently needs nautilus to not draw the background. However, this means that you won't have any icons on the desktop! All that need be done by GNOME developers (specifically nautilus/eel people) is add an alpha channel to the background wallpaper pixmap -- which they may one day do.