Comment 128 for bug 260492

An update for the record:

People were still reporting this into 2011, though this was marked fixed. (Except for a wish for upgrades to clean up cruft under ~/)

It was happening to me too, and has now been fixed again: see bug 797000. Permanently, I hope -- it seems we've replayed this problem. 'nautilus-folder-handler.desktop' is installed under /usr, and, with a clean config under .local, you can open folders with other apps, like media players. But the Trash, and places that should be opened with Nautilus, get Nautilus, and not those other apps, anymore. So I think the later comments were valid, and have finally been addressed.

Like I said, hope it stays that way! :)