different version conf files in home

Thank you for your suggestion. However, the changes you are requesting aren't really a bug (switching between different linux distros and using the same home directories is not that common...) and require more discussion, which should be done on an appropriate mailing list or forum. [WWW] http://www.ubuntu.com/support/community/mailinglists might be a good start for determining which mailing list to use.

If I formatted a partition with this version of ext3 and then when I tried to read it with another version of ext3 and it showed up like asci code, ie: i cat'd a binary file, would that be a bug or a suggestion?

That would be a bug. But your initial report is very unclear and vague - in most cases your problems have nothing to do with different distros as such but with the different versions of packages installed in the various distros. E.g., you use application X as version 1.0 in distro A, then switch to distro B that uses X in version 2.0, the config files will be updated (and maybe moved, renamed, ...) to fit the new specifications of version 2.0. When logging back to A, version 1.0 doesn't know how to handle the new config files. So your bug report amounts to being able to use different versions of a software for the same user (with the same home dir).
Regarding the question of "bug report or something to discuss": I do not see at what point a developer could do changes so that your bug would be corrected. If all programs would follow the freedesktop specification http://standards.freedesktop.org/basedir-spec/basedir-spec-latest.html than it would be maybe possible to set $XDG_CONFIG_HOME and $XDG_DATA_HOME to something like $HOME/.ubuntu/... instead of the default locations. However, several programs don't yet use it and would save the configuration files to the home directory anyway. What you *could* do however is filing a bug report against a particular software package that doesn't handle storing and loading config files as you want it to.

I hope it's now clearer why I invalidated the bug. Your suggestion (in the general, Ubuntu-wide way) would require a lot of changes to a lot of packages and is therefore not handled well by a bug report - discussing it on mailing lists or using something like Ubuntu brainstorm [WWW] http://brainstorm.ubuntu.com/ would be a much better option.