So apparently my wallpaper is stuck and acting like a layer on top of everything else. For example, when I initiate Mission Control, the wallpaper covers the other screen previews. However I can switch to them but without actually seeing them as clickable buttons .. I can't even change the wallpaper !! nothing happens when I try to !
This picture shows what I mean, it is currently in mission control :

I had a problem where I cannot change the background wallpaper, and that it keeps reverting to the one in the picture Wallpaper settings keep resetting? , I have a feeling this is related.
*EDIT
I realized that Desktop 1 is the culprit here ... check this pic out :

IF I click on Dekstop 1, I revert to the same galaxy wallpaper. It seems Desktop 1 is just stuck... I created Desktop 2 and can easily change wallpapers, however I do not know how can I make Desktop 2 the default desktop and delete desktop 1 ... Any thoughts ?