The "folder containing the relevant items" - /Library/Desktop Pictures - has nothing to do with jaybass's problem which is that the pref pane that accesses that folder's contents is missing from his System Prefs GUI. (Whether or not it still lives on his Mac hasn't been established.)
On my machine running Lion OS X 10.7.5 this is the route:
HD / System / Library / Preference Panes / DesktopScreenEffectsPref.prefPane
So, if I understand you correctly, the last item no longer exists and needs to be reconstructed. Can one not search around and determine whether it (or what other essential) actually does still live on his Mac and proceed from there?
The pref pane is a completely separate animal from System Preferences.app: the latter is a GUI to access and manipulate the former, so "they're related only by marriage, not blood".
I've been working on the (logical starting point, I think) assumption that the pref pane is alive, well, and where it belongs, but the app has been corrupted such that it isn't showing, but that's not necessarily the case, and the problem may in fact lie with the pref pane itself.
Ball's back in jaybass's court.
