After installing numerous multimedia programs and fiddling around with the settings, uninstalling the Intel drivers and reinstalling the Intel drivers, and messing around with refresh rates and other driver related tweets, I was unable to get rid of the tearing.
The only solution I have found so far is to change the Windows theme to an Aero theme. A detailed explanation of why this Aero theme solution works can be seen HERE
If you still want to have the functionality of Aero (no tearing), but still want a custom background, make sure you first choose an Aero theme, and then change the background afterwards (this will apply your background change to the selected theme).
If your Windows verision does not include Aero there is a fix HERE