Comment 4 for bug 178067

As I am upgrading to the Hardy Heron beta, I noticed the following change in /etc/sysctl.conf:

# Increase inotify availability
fs.inotify.max_user_watches = 524288

So this bug will almost certainly be resolved by default Hardy Heron, and for anyone else, the above method of increasing /proc/sys/fs/inotify/max_user_watches works for sure, and the hack from geekphreak may work as well.