I guess this is fixed now, as in 10.04 I can no longer Shift+drag the
icon from the Places menu.     Originally it was giving the error "You
cannot copy a folder into itself." but that no longer happens.

** Changed in: gnome-panel (Ubuntu)
       Status: Triaged => Invalid

** Changed in: gnome-panel (Ubuntu)
       Status: Invalid => Fix Released

-- 
Cannot place Home Folder icon on Desktop - "you cannot copy a folder into 
itself" 
https://bugs.launchpad.net/bugs/131739
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