Version:            (using KDE KDE 3.5.0)
Installed from:    Gentoo Packages
Compiler:          gcc (GCC) 3.4.4 (Gentoo 3.4.4-r1, ssp-3.4.4-1.0, pie-8.7.8) CBUILD="i686-pc-linux-gnu", CFLAGS="-march=athlon-xp -O3 -pipe -fomit-frame-pointer -fforce-addr -momit-leaf-frame-pointer -ftracer", CXXFLAGS="-march=athlon-xp -O3 -pipe -fomit-frame-pointer -fforce-addr -momit-leaf-frame-pointer -ftracer -fvisibility-inlines-hidden", LDFLAGS="-Wl,-Ol -Wl,--enable-new-dtags -Wl,--sort-common"
OS:                Linux

After setting "Align to Grid" from the menu, new icons placed on the desktop often move other icons to the side or down.  I ran a series of tests from a term touching test files onto the desktop, I recorded 16 touches in http://www.web-milk.co.uk/icon_placement.txt  I generated files test1 - test16, the numbers on the above text file represent each of the files and their position after each touch.

I also used a loop to generate 60 test$x files and they grouped themselves in the top left corner in no obvious pattern.  I turned off "Align to Grid" and re-ran the loop (after deleting the test files) and they (correctly) positioned themselves from left to right (wrapping at the right edge) across both screens.

I find Align to Grid useful and I hope this can be resolved soon!