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Finder not expanding folders anymore after OSX Lion re-installation

I've just reinstalled Lion after having replaced the stock HDD with an OCZ Vertex 4 SSD and everything is fine apart from the Finder, which does not expand folders anymore..see the following ...
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Moving desktop folder back to where it should be!

I've had a real headscratcher... the other day I was downloading a large folder from FTP to a folder on my desktop. When I went to check the files half were missing, I soon found out it was because ...