I have this bug too, and I figured out that the problem is that the
whole path to the directory should be accessible (but not writable).

/home/username/Desktop/

/home should be at least o+rx
/home/username should be at least o+rx
/home/username/Desktop/ should be at least o+rx

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folder sharing in gnome not working in Lucid
https://bugs.launchpad.net/bugs/562960
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