Can't get Nautilis spatial mode to work on a clean Breezy install

[Steve Zatz]

I have a Dell pc that was upgraded from Warty through to Breezy in
which Nautilis acts as expected if you use gconf-editor and uncheck
'always_use_browser' in apps/nautilis/preferences.  However, on a
clean Breezy install on an IBM Thinkpad T30, doing the same thing does
nothing -- nautilis stays in "browser" mode.  I've looked at
~/.gconf/apps/nautilus/preferences/%gconf.xml and it says that
'always_use_browser' is set to false.  In the
System->Preferences->File Management, "Always open in browser windows"
is unchecked.  Any ideas?