Wierd Folder View experience in openSUSE kde4 desktop

When initially setting up openSuse 11.3 KDE desktop, I selected folder view for the Desktop Settings - Plasma Workspace (under the Activity button) and Hit the Apply button. Voila! The folders on the /home/me/Desktop path appeared as expected.

However a little message says that the default setting is /home/me.

I brought the desktop down and restarted it later on in run level 5. Ooh ooh… the desktop came up with all the folders on the /home/me area, as the message said.

I went back to the Desktop Settings, clicked “Desktop”, “Apply” and all the folders disappeared as expected. Then I reselected Folder View again and all the folders on /home/me/Desktop came back.

Some reading led me to try the Custom Settings under the Location button. I selected the “Specify a folder:” option and told it that /home/me/Desktop IS the place to look whenever the desktop comes up under the gui.

Question:

Why are the folders on the Desktop area being shown, if we really mean /home/user area? Did something in the KDE widget code get overlooked here?

I am trying to dig deeper into the internal workings, so would appreciate some detail in the explanation.

Thanks