Looks like it is https://bugzilla.gnome.org/show_bug.cgi?id=559038. Could you please specify which nautilus version are you using?
** Bug watch added: GNOME Bug Tracker #559038 https://bugzilla.gnome.org/show_bug.cgi?id=559038 ** Changed in: nautilus (Ubuntu) Status: New => Incomplete -- You received this bug notification because you are a member of Desktop Packages, which is subscribed to nautilus in Ubuntu. https://bugs.launchpad.net/bugs/930134 Title: nautilus always does show_desktop Status in “nautilus” package in Ubuntu: Incomplete Bug description: Even if show_desktop is set to false and exit_with_last_window to true (gconftool and gconf-editor confirm both are set so), Nautilus displays desktop (painted blue, "Change Desktop Background" from menu does nothing - no dialog appears); shows icons (with proper text but no pictures); remains after the window is closed, exits only via "nautilus --quit". Nautilus up to 3.2.1, xfce (Xubuntu 11.10), same result whether xfce "display compositing" is on or off. To manage notifications about this bug go to: https://bugs.launchpad.net/ubuntu/+source/nautilus/+bug/930134/+subscriptions -- Mailing list: https://launchpad.net/~desktop-packages Post to : [email protected] Unsubscribe : https://launchpad.net/~desktop-packages More help : https://help.launchpad.net/ListHelp

