Hello, here's directions for an older OSX version, not on 10.7 to see if locations of the files have changed...
Safe Boot , (holding Shift key down at bootup), use Disk Utility from there to Repair Permissions, move these files to the Desktop if they exist. Will require resetting some options.
/Users/YourUserName/Library/Preferences/ByHost/com.apple.screensaver.<12digitHex Number>.plist
/Users/YourUserName/Library/Preferences/ByHost/com.apple.screensaver.slideshow.< 12digitHexNumber>.plist
/Users/YourUserName/Library/Preferences/com.apple.desktopscreensaver.rsspictures .plist
/Users/YourUserName/Library/Preferences/com.apple.preference.desktopscreeneffect .plist
/Users/YourUserName/Library/Preferences/com.apple.systempreferences.plist
/Users/YourUserName/Library/Preferences/com.apple.desktop.plist
Then reboot once more.
PS. Safe boot may stay on the gray radian for a long time, let it go, it's trying to repair the Hard Drive.
Oh, are other things remaining after a reboot, like Dock Settings & Bookmarks?