Hi All;
I installed a little app by the name of Ubuntu Tweak ( 
http://www.ubuntugeek.com/howto-tweak-ubuntu.html )
This is for use with Gnome. After tweaking a bit and trying to avoid the 
obvious pitfalls as noted by the app creator in the app, I logged out and, 
voila, I had the above problem of Home being displayed on the desktop. 

The tool allows to set the path to the Desktop folder, which after
selecting this option, all was correct again.

Summary: Those who can't find the above mentioned "~/.config/users.dirs.dirs" 
or anything refering to it, try using Ubuntu tweak
Cheers

-- 
Gnome Thinks Home Directory Is Desktop
https://bugs.launchpad.net/bugs/151576
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