Aha - right clicking on /home/soneill and going to 'properties->open
with' shows gnome-terminal.

I am happy for you to close this bug report on that basis as it appears
to be a sequence of events which will be nigh on impossible to unpick -
but if you would like more information then please let me know.

-- 
Places menu opens terminal in home folder
https://bugs.launchpad.net/bugs/296201
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