So this still appears to be a problem. My CPU usage basically makes the computer unusable for about 5 seconds while the wallpaper changes. This is a big deal while I'm working in AutoCAD as it completely disrupts my workflow. Do the files need to be a specific format? i.e. JPG or JPEG?

I'm seeing the same things on my system. I don't know if the following information will help, but here's some analysis I was able to do.

If you look at the attached output from Windows Task Manager, you'll see the DisplayFusion CPU usage has jumped from a normal 0.1-0.5% to 8.9% when the wallpaper changes. I'm using 3 monitors with a separate image on each monitor. Curiously, when this happens the Windows Explorer process also jumps from it's normal 0.1% to 3.1%.

I also ran Microsoft's Process Explorer Tool and what is happening is the DisplayFusion Settings application is being launched as a new thread (see attachment). Looking inside the registry, I see it is updating the Display Fusion Wallpaper registry keys with the new current Wallpaper image definitions. But it also updated every registry key which I see when using Microsoft's Process Monitor tool. It also seems to be taking about 4-5 seconds for this process to run which, curiously, is about the same as if I interactively brought up the DisplayFusion Setting application, changed a single value and did an OK.

Hope this information helps.

Here's the Debug Information.

As the originator of this problem wrote, there are cases where this severely impacts the operation of the computer. The machine is basically disrupted/locked up for several seconds.
In my experiences, two things happen. In some cases, the active window display starts flickering. I've seen this a lot in applications like Notepad++, Microsoft Word and Microsoft Access. It's just the active window that starts flickering. Other open windows are not effected. In other cases, where I'm typing text into an application (Word), the characters I'm typing do not appear on the screen for approx 5 seconds and then all appear at once. It's like the window display is locked up and after DisplayFusion is done doing it's thing, all the buffered characters I've typed appear at once.
Now this problem seems also to be related to how long my computer has been running. I run my main computer 24x7 and, at first, this problem is not seen. After about 2 days of operation, the effect becomes more noticeable. After about 4-5 days, the disruption is severe enough that I'm forced to restart the computer. So as the original poster said, 'workflow' is impacted.

I was seeing the same, and following your guidelines only made it slow, but did not change the behavior.
Then I spotted in the main DF Options screen the "Aero color settings (Windows 7 and higher)" section... I changed that from "Change the Aero color based on the current wallpaper image" to "Don't change the Aero color", and it seems the issue has gone away, including the weird flickering in some topmost Windows applications!

@LGotkin, did you ever see this resolved? I'm seeing the same behavior you mentioned. When the wallpaper changes, my machine nearly locks for 3-5 seconds & some elements flicker. I've mostly negated the impact by just setting the wallpaper to change only once per day, but it's jarring when that happens in the middle of something.

Mine's still doing it! Perhaps people on newer CPUs with many more cores will have less of an impact, but my i5-4670K is definitely hanging up for a few seconds everytime the wallpaper changes!

Desktop gaming PC, i5-4670k, 32GB RAM, GTX1070Ti, 2x SSD, Windows 10, DF Pro via Steam.

Done. Mine's a desktop as well. i7-8700k, 32gb DDR4, GF1080 GPU, 512gb Samsung 970 Pro SSD.

I'm on my Macbook ATM, will do this tomorrow when I am behind my PC again...

As agreed, here's mine as well!...

Done, will observe...

So far so good! Haven't seen any freezes since changing that setting!

Just saw this update. Will enable that setting and see how it goes! Thanks!

Ok, so I'm still finding I get major slowdowns when the wallpaper change happens even with the "Process the wallpaper images internally" setting enabled. See what I see here:

https://youtu.be/UhN4L7pcPXk

Freeze/slowdown hits at about the 7s mark and lasts until about the 12s mark. I moved the calculator app window around to make it more obvious. You can see perf monitor in the background, and nothing is crazy out of whack. CPU seems to only spike to about 60%, no major spikes in disk or GPU. Not sure what else it could be

Done. See attached. Timestamp should be a bit after 4:45pm US Central time. Thanks!

It's enabled. I assume I should try with it disabled?

Aaaaannndddd there it is... No stuttering with that disabled.

Just curious... Is this a Windows thing that can't be fixed or something that might be able to be worked on in a future version of DF? It's nice to have the accent colors automatically match up with all of the beautiful wallpaper.

I disabled that a long time ago, because it always gives stutters, even when not using DF, so I guess it's a Windows thing...

Note: I'm seeing the same thing as the original poster: windows freezing when wallpaper changed. When I went to disable the accent color, I clicked on the accent color I wanted and saw the exact same behavior. I turned it off and pushed up my timer to every minute to test the affect this had.

been going for many minutes now with absolutely no issues.

Thanks!