From White Bolt Software:
Winamp Wallpaper will figure out the location of the song your listening to in Winamp, search for an image of the album cover art in the folder associated with that song, and display it as your desktop wallpaper. Features include: Use your current desktop background; Choose your own background; Choose to have the album cover be your background; Border color and size selection; Album cover location selection; Album cover and wallpaper size selection; Supports all image formats; Uses a small System Tray icon and right-click menu; Supports dual monitors. Also features like better album location preferences, enhanced color picker, and support for XP Themes.
Version 2.0 includes the option to pull the album cover from Amazon.com, from the folder image, or from within the ID3 tag. It also hooks directly in to Winamp to see when it's not playing a song. Also, many bugs were fixed.