Comment 18 for bug 642222

ok, I've got a patch, and I also have an easier way to debug this app for you.

so first, debugging:
if you leave all the other files from the package the same, you can rm /usr/lib/nautilus/extensions-2.0/python/nautilus-terminal.py
instead create ~/.nautilus/python-extensions, and you can symlink nautilus-terminal.py into that (or develop it from there).

I added python logging then instrumented NautilusTerminal.get_widget and printed uri so I could see what that looks like for the desktop and for the path alike.

Turns out that the uri for the desktop looks like this:
x-nautilus-desktop:///

vs the uri for directories looks like this:
file:///home/devon

so basically added if
uri.startswith('x-nautilus-desktop'):
  return

to the beginning of get_widget and it solved the problem. You can probably remove the code later in that function that detects the desktop dir, because i think this will catch any reference to the actual desktop.