diff -Naurp xfdesktop.bak/src/xfce-desktop.c xfdesktop/src/xfce-desktop.c
--- xfdesktop.bak/src/xfce-desktop.c	2008-08-28 17:54:21.000000000 +0200
+++ xfdesktop/src/xfce-desktop.c	2008-09-06 21:47:31.000000000 +0200
@@ -219,8 +219,7 @@ xfce_desktop_setup_icon_view(XfceDesktop
         case XFCE_DESKTOP_ICON_STYLE_FILES:
             {
                 ThunarVfsPath *path;
-                gchar *desktop_path = xfce_get_homefile("Desktop",
-                                                        NULL);
+                const gchar *desktop_path = xfce_get_user_special_dir(XFCE_USER_DIRECTORY_DESKTOP);
 
                 path = thunar_vfs_path_new(desktop_path, NULL);
                 if(path) {
@@ -282,7 +281,6 @@ xfce_desktop_setup_icon_view(XfceDesktop
                     g_critical("Unable to create ThunarVfsPath for '%s'",
                                desktop_path);
                 }
-                g_free(desktop_path);
             }
             break;
 #endif
diff -Naurp xfdesktop.bak/src/xfdesktop-file-icon-manager.c xfdesktop/src/xfdesktop-file-icon-manager.c
--- xfdesktop.bak/src/xfdesktop-file-icon-manager.c	2008-08-28 17:54:21.000000000 +0200
+++ xfdesktop/src/xfdesktop-file-icon-manager.c	2008-09-07 00:01:34.000000000 +0200
@@ -1560,6 +1560,7 @@ xfdesktop_file_icon_manager_populate_con
                                                   GtkMenuShell *menu,
                                                   gpointer user_data)
 {
+    gboolean was_templates_dir_found = TRUE;
     XfdesktopFileIconManager *fmanager = XFDESKTOP_FILE_ICON_MANAGER(user_data);
     XfdesktopFileIcon *file_icon = NULL;
     const ThunarVfsInfo *info = NULL;
@@ -1709,11 +1710,16 @@ xfdesktop_file_icon_manager_populate_con
                     gtk_widget_show(tmpl_menu);
                     gtk_menu_item_set_submenu(GTK_MENU_ITEM(mi), tmpl_menu);
                     
-                    templates_path_str = g_build_filename(xfce_get_homedir(),
+                    templates_path_str = xfce_get_user_special_dir(XFCE_USER_DIRECTORY_TEMPLATES);
+                    if (G_UNLIKELY(templates_path_str == NULL)) {
+                      templates_path_str = g_build_filename(xfce_get_homedir(),
                                                           "Templates",
                                                           NULL);
+                      was_templates_dir_found = FALSE;
+                    }
                     templates_path = thunar_vfs_path_new(templates_path_str, NULL);
-                    g_free(templates_path_str);
+                    if (G_UNLIKELY(was_templates_dir_found == FALSE))
+                      g_free(templates_path_str);
                     if(templates_path) {
                         have_templates = xfdesktop_file_icon_menu_fill_template_menu(tmpl_menu,
                                                                                      templates_path,