Hi Art, see if this is it...
OS X: System Preferences stops responding after viewing Desktop & Screen Saver pane
Products Affected
OS X Lion, OS X Mountain Lion, iPhoto
Symptoms
System Preferences may stop responding if you select an iPhoto Event that is no longer available in iPhoto as the source for your desktop picture.
Resolution
1. Quit System Preferences if it's running.
If System Preferences is running but not responding, choose Force Quit from the Apple menu, or right-click its icon on the Dock and choose "Force Quit".
2. Open iPhoto.
3. Select Events in the Source list (on the left side of the iPhoto window).
4. Double-click on any of the events shown. Verify that the name or date of this event is now shown under RECENT in the Source list.
5. Choose Apple menu () > System Preferences.
6. Click Desktop & Screen Saver, click on Desktop, and verify that you can now select a new desktop picture.
http://support.apple.com/kb/TS4407?