Plasma's desktop pager (which replaces kde3's) doesn't have this issue.
I should also note that it doesn't have the functionality to display the
wallpaper as the pager background. :P
The wishlist bug for that is bug 244094.
** Changed in: kdeaddons (Ubuntu)
Status: Confirmed => Fix Released
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Desktop Pager backgrounds disappear with applet handles
https://bugs.launchpad.net/bugs/61014
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