Hovering over icons in Gnome 2.10 causes nautilus to reload

[wizard_ct]

I have a completely fresh install, 2.6.13-ck2, xorg 2.6.2, gnome 2.10.2.

When the desktop loads up, there are the default 3 desktop icons, and my home dir in a nautilus window and some icons in that. Hovering over any of these icons causes a complete refresh of the desktop back to the state it loads in. Everything else works fine - including icons on the panels.

My mouse is a regular ms usb optical, and is configured properly in the xserver.

Anyone seen this before and know of a fix?