The Desktop or Explorer window or folder will automatically refresh itself when you make a change to its contents. This could be creating a new shortcut, creating or saving a new file or folder in it, and so on.
But at times, you may find that the desktop or the window may not auto-refresh and to see the changes, you have to manually Refresh it, either by pressing F5 or via the context menu.
Desktop does not refresh automatically
If you find that you need to frequently refresh the desktop, you can follow these steps to try and fix the problem.
Open Registry Editor and navigate to the following registry key:
HKEY_CLASSES_ROOT\CLSID
Here right-click and search for dontrefresh. If you find it, and if it has a value set to 1, change its value to 0. If you do not see it, create it and give it a value 0.
This is known to have helped fix the problem in most cases. If it does not, here are a few other suggestions:
1] Use ShellExView from Nirsoft and disable third-party shell extensions which may be obstructing the smooth functioning of Windows Explorer. This may be a trial-and-error method.
2] Restore the default Explorer Settings. To do so, open Folder Options and under the General tab, press Restore Defaults. Click Apply and Exit.
3] Some have found that deleting the thumbnail cache and/or rebuilding the icon cache has helped them resolve the issue.
This problem appears to be quite common – so much so that there is even an acronym made for it: WEDR – Windows Explorer Doesn’t Refresh! So the BSOD now has a companion! 
Microsoft has released some hotfixes to resolve such issues at KB960954 and KB823291. Please check IF they are applicable to your operating system and situation before you decide to download and apply them.
UPDATE: Please also see the comment by Truth101/Guest below.
Check this post if you find that your Recycle Bin does not refresh correctly.
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