Agreed.... have you tried experimenting with a second mouse (USB connected) just to confirm that it is not an issue with the mouse you are using??
IS the problem only when you right click the desktop
OR
Does right click fail to work on anything??
Left Click any blank area of the desktop
Then
Hold the Shift key and strike the F10 key
Does your options appear when using that keyboard combination.
It works on anything you highlight with a left click prior to using Shift + F10 (folders, files, etc.,)
It's a well known means of simulating a right click within Windows using your keyboard instead of your right mouse button.