Comment 16 for bug 344228

OK, I should have looked before posting. There are no soft links, there is simply an entry in an xml file added to populate the wallpapers on that menu. ~/.gnome2/backgrounds.xml is the file. There should be no change required to the System->Preferences->Appearance menu to address Tim's concern.

My paths are a bit wonky above. They should be closer to ~/.gnome2/background/current. That would leave room for later functionality add of ~/.gnome2/background/previous[0-9] if someone thought that was important.