The position of icons on the desktop is tied to the position of that
directory's icons when viewed in a window. This presents a number of
irratations and usability issues, especially when nautilus' option to use
the home directory as the desktop is used. For example, when viewing as a
desktop, a background image may be used as a guide to icon locations, with
icons placed in particular locations to avoid obscuring elements of a
visually appealing background.

More importantly, the size of the desktop varies substantially vs. the size
of windows that might view the same directory. This can result in the
desktop directory being very difficult to browse in a windowed view, since
by definition the window will be smaller then the desktop in virtually all
cases. Also, the following procedure is particularly crippling:

1) Open largely populated desktop directory in a window.
2) Resize the window to its minimum size.
3) Select "Clean up by name"
4) Close window, and restart nautilus.

Expected behavior:
Desktop remains useful

Observed behavior:
Icons are fit to a canvas the width of the window from step 2, often
proceeding to be placed far below the visible screen.

Personally, I would be happier if the desktop had a completely independant
storage for icon position, in such a way that icons could be arranged
differently in the window and desktop contexts, since the contexts are
different enough that users will likely think about the directory layout
differently in each.