Desktop displays root directory (/) after upgrade from Gutsy to Hardy

Confirmed.
The workaround worked for me, too.
Please note that there has been the correct path already been displayed before and that you should say "no" when being asked for moving the files. Maybe just changing the some dialog element back and forth and then clicking Apply would have helped already.
I'm guessing that it comes from kubuntu-default-settings. Please re-assign the package, if you know it better.

Confirmed. Any small change to enable the apply button is enough to trigger correction.

Additionally, When applying the bogus change a diaog comes up asking if I want to move my files in my desktop at "/" to my new desktop path. Nothing wrong with that except it has two buttons, "Move" and "Cancel". I believe it should be Yes and No, otherwise its rather counterintuitive what one should do.

Bug confirmed, but workaround does not work. If I use it, nothing changes.

The same thing happened to me after I upgraded KDE to 3.5.9 while still using Kubuntu 7.10
(deb http://ppa.launchpad.net/kubuntu-kde-3.5.9/ubuntu gutsy main)

The above solution doesn't seem to work for me though:
If I use "System Settings > About Me > Paths" to update the path, it is written into ~/.config/user-dirs.dirs correctly. After restarting KDE the path is still present in user-dirs.dirs, but "kde-config --userpath desktop" reveals that my Desktop still points to /. Also of course my Desktop shows me icons for my root-directory.

My next approach, namely to put the line "Desktop=$HOME/Desktop" into the [Paths]-section of ~/.kde/share/config/kdeglobals doesn't solve the problem either.

Further research finally led to a solution:
(found on: http://ubuntuforums.org/showthread.php?t=609005&page=2)

I deleted the XDG_DESKTOP_DIR-line from ~/.config/user-dirs.dirs, installed xdg-user-dirs, ran xdg-user-dirs-update, logged out and in again and everything was nice and dandy - again. My Desktop is no longer / but ~/Desktop.

The workaround posted by Markus Straub worked perfectly for me.

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?

Daniel, I can't exactly remember the contents of ~/.config/user-dirs.dirs, but I tried to correct the information there and it had no influence. xdg-user-dirs was not installed by default. it rewrote user-dirs.dirs to this:

XDG_DESKTOP_DIR="$HOME/Desktop"
XDG_DOWNLOAD_DIR="$HOME/Desktop"
XDG_TEMPLATES_DIR="$HOME/Templates"
XDG_PUBLICSHARE_DIR="$HOME/Public"
XDG_DOCUMENTS_DIR="$HOME/Documents"
XDG_MUSIC_DIR="$HOME/Music"
XDG_PICTURES_DIR="$HOME/Pictures"
XDG_VIDEOS_DIR="$HOME/Videos"

Maybe the tool also changes data in other places?

OK, running xdg-user-dirs didn't fix it for me at first, came back with an error ('Can't write'). Turned out that somehow ~/.config was owned by root. chown fixed that, then running xdg-user-dirs and log-out/log-in, and everything works now.

I want to point you to bug #208253, which seems to be closely related to this one.

Shouldn't be an issue with Intrepid/KDE4.

> Shouldn't be an issue with Intrepid/KDE4.

How can this bug be closed if it concerns the gutsy -> hardy upgrade where it still not fixed? Nobody was talking about Intredpid.

Bugs are fixed in Intrepid. (Or the development series in general.)
If they qualify for an SRU, they will be backported to whatever series needs a fix. (See https://wiki.ubuntu.com/StableReleaseUpdates)

Since the fix in this case is using KDE4 which doesn't have this problem, the fix for this bug doesn't qualify for an SRU.

Using KDE4 isn't an option in the specified case, as it's not possible to upgrade to it during a gutsy->hardy upgrade.

Therefor, the bug shouldn't be marked fixed, but marked WONTFIX, as all efforts seem to go to intrepid instead. In which case it's a known error that should be included in the release notes.