Markus, what was the contents of XDG_DESKTOP_DIR in that file, when you removed 
it, and what is it now?
Wasn't xdg-user-dirs installed? (it should get pulled in by kubuntu-desktop). 
Something maybe is misconfiguring this file in the absence of xdg-user-dirs?

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Desktop displays root directory (/) after upgrade from Gutsy to Hardy
https://bugs.launchpad.net/bugs/174532
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