This is a pretty common practice—if you don’t do it, you probably know someone who does—but PC World says it has some definite downsides:

Most important of all, files on the desktop are not as well protected as files in libraries like My Documents and My Pictures.

For instance, if you use System Restore to return Windows to its state as of last Wednesday, the feature will remove any files added to the desktop since that date. The files in My Documents will be left untouched.
What’s more, many file-based backup programs don’t, by default, back up the desktop. You can change that, of course, somewhere in your backup program’s settings. Read the whole article at LifeHacker.com

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