Microsoft disabled this feature because they want you to upgrade. However there are many free ways to change your wallpaper and customize your Windows 7 Starter Edition. Support Engineers are under obligation to tell you that you are not allowed to do
certain things or that you simply can't do certain things, but they are simply not correct. You are allowed to use add-ons and 3rd party software all you want to change Windows 7 Starter Edition, and you most certainly CAN.
Here are some options that work well:
http://www.howtogeek.com/howto/16041/change-the-wallpaper-and-customization-settings-in-windows-7-starter-edition/
See the above link for instructions to use: StarterBackgroundChanger_V08.exe
There are other programs, too (like Oceanis). With a little google searching you can get what you need to do the job, without spending more money on uprades. Nothing wrong with upgrading, per se, but if you are happy with Starter aside from the lack of
customization features, then there are other options available. In the not to far future Microsoft will have to come up with a better strategy for making their zillions, since most software is going to the Cloud and each PC type gadget is simply going to
access it there. With Iphones, Androids, Smartphones heading for Cloud computing, the approach that each PC is going to have to have a personal copy of a piece of software from Microsoft (or any other company) is doomed.
Yup...