How to programmatically fight with WPS:Desktop background

Is there a way to find where the desktop's background is stored and change it? I've heard it's possible with the WinSetObjectData() function but I don't know how to do this?

Yes, you do use WinSetObjectData(). You can find the relevant setup string in the WPS Programming Reference. e.g.

 WinSetObjectData(WinQueryObject("<WP_DESKTOP>"),
   "BACKGROUND=c:\somewhere\something.bmp,T,1,I;");