I have never been able to get SVG files to work properly in KDE. I'm using 3.3.1-1 from sid on sarge. I have KSVG installed, and 'svgdisplay' shows the graphic fine, and Konqueror shows thumbnails for them. Fiddling with the SVG mimetype allows me to see them in Konqueror, but I still can't use them as icons or desktop backgrounds.
Am I doing something wrong here, or are the Debian KDE packages incapable of using SVG in these ways?

