On Ubuntu 10.10 I have the same problems for some days now, did not change anything in Banshee and there was no update I guess.

When I start with sudo banshee, the program would start, but would not find the music files in the music home folder.
Here is what I get in the terminal, perhaps it helps:
[Info  20:46:43.935] Running Banshee 1.8.1: [Ubuntu 10.10 (linux-gnu, i686) @ 2011-02-02 09:04:16 UTC]
[Warn  20:46:48.385] DBus support could not be started. Disabling for this session.
[Info  20:46:49.094] Migrating album-art cache directory
[Info  20:46:49.121] Migrated 0 files in 0.003229s
[Warn  20:46:56.015] Caught an exception - System.ApplicationException: No support GNOME Settings Daemon could be reached. (in `Banshee.MultimediaKeys')
  at Banshee.MultimediaKeys.MultimediaKeysService.Banshee.ServiceStack.IExtensionService.Initialize () [0x00000] in <filename unknown>:0 
  at Banshee.ServiceStack.ServiceManager.StartExtension (Mono.Addins.TypeExtensionNode node) [0x00000] in <filename unknown>:0 
[Warn  20:46:56.015] Extension `Banshee.MultimediaKeys.MultimediaKeysService' not started: No support GNOME Settings Daemon could be reached.
[Warn  20:46:56.053] Add-in could not be loaded: The required addin 'Banshee.Mpris,1.0' is disabled. - Mono.Addins.MissingDependencyException: The required addin 'Banshee.Mpris,1.0' is disabled. (in `Mono.Addins')
  at Mono.Addins.AddinSessionService.ResolveLoadDependencies (System.Collections.ArrayList addins, System.Collections.Stack depCheck, System.String id, Boolean optional) [0x00000] in <filename unknown>:0 
  at Mono.Addins.AddinSessionService.ResolveLoadDependencies (System.Collections.ArrayList addins, System.Collections.Stack depCheck, System.String id, Boolean optional) [0x00000] in <filename unknown>:0 
[Warn  20:46:56.053] Caught an exception - Mono.Addins.MissingDependencyException: The required addin 'Banshee.Mpris,1.0' is disabled. (in `Mono.Addins')
  at Mono.Addins.AddinSessionService.ResolveLoadDependencies (System.Collections.ArrayList addins, System.Collections.Stack depCheck, System.String id, Boolean optional) [0x00000] in <filename unknown>:0 
  at Mono.Addins.AddinSessionService.ResolveLoadDependencies (System.Collections.ArrayList addins, System.Collections.Stack depCheck, System.String id, Boolean optional) [0x00000] in <filename unknown>:0 
[Warn  20:46:56.053] Extension `/Banshee/ServiceManager/Service/__nid_9' not started: The required addin 'Banshee.Mpris,1.0' is disabled.
[Info  20:46:56.057] Updating web proxy from GConf
[Warn  20:46:56.283] Caught an exception - System.ApplicationException: No support GNOME Settings Daemon could be reached. (in `Banshee.MultimediaKeys')
  at Banshee.MultimediaKeys.MultimediaKeysService.Banshee.ServiceStack.IExtensionService.Initialize () [0x00000] in <filename unknown>:0 
  at Banshee.ServiceStack.ServiceManager.StartExtension (Mono.Addins.TypeExtensionNode node) [0x00000] in <filename unknown>:0 
[Warn  20:46:56.283] Extension `Banshee.MultimediaKeys.MultimediaKeysService' not started: No support GNOME Settings Daemon could be reached.
[Info  20:46:56.284] All services are started 7.897435
[Warn  20:46:56.754] Migrating Internet Radio Stations - System.IO.DirectoryNotFoundException: Directory '/root/.config/banshee-1/plugins/stations/user' not found. (in `mscorlib')
  at System.IO.Directory.GetFileSystemEntries (System.String path, System.String searchPattern, FileAttributes mask, FileAttributes attrs) [0x00000] in <filename unknown>:0 
  at System.IO.Directory.GetFiles (System.String path, System.String searchPattern) [0x00000] in <filename unknown>:0 
  at Banshee.InternetRadio.XspfMigrator.Migrate () [0x00000] in <filename unknown>:0 
[Info  20:46:57.197] nereid Client Started