If you encounter the same problem I did, you’ll have to also turn it on through the Windows Features menu. We’ll run through the entire installation just to be safe.
Installing in Windows Update
Open up Windows Update through the start menu, and you should see “There are Windows Ultimate Extras available for download”, so click on the “View available Extras” link.
Check all the updates (I already installed it before I remembered to screenshot it), and then click on the Install button.
Enabling DreamScene Component
Again, this step may not be required for you, but it was for me. Open up control panel and click the Programs link.
Then click on “Turn Windows features on or off”
Now you should see Windows Ultimate Extras and then Windows DreamScene in the list. Check the box, and then click OK.
It’ll tell you the features are being configured…
And then it will prompt you to reboot. Make sure you reboot at this step.
Choosing a DreamScene Wallpaper
Right-click on the Desktop and choose Personalize, and then choose Desktop Background. You’ll notice that the drop-down menu contains a number of new items for video files, including one for “Windows DreamScene Content”, which contains all of the new videos in the additional components pack.
You’ll also notice there are more options for how you can position both pictures and videos.
Now you’ve got moving pictures for your wallpaper. You can’t see it through the screenshot, but it’s animated… and useless…
If you want to pause the wallpaper, perhaps because you or somebody next to you is now having a seizure, just right-click on the desktop and choose Pause DreamScene.
This has to be one of the most useless features ever added to Windows. It spikes the CPU in my beefy laptop at a solid 15%.
Windows DreamScene is only available for people using Vista Ultimate, but don’t worry, you aren’t missing much.