Disclaimer: I am not a Linux programmer, and this answer contains modifying files out of your home folder. It works for me, but do it on your own risk.
This problem appears when you configure your Home icon to have a quicklist for your favourite places the way it is described here.
The way to solve it, as written on the Bug 842257 page, is instead of creating a copy of /usr/share/applications/nautilus-home.desktop in ~/.local/share/applications and modifying this copy, rather modifying the original file. So the steps are:
Delete the copy, if there is any: ~/.local/share/applications/nautilus-home.desktop
Open a terminal and write:
gksu gedit /usr/share/applications/nautilus-home.desktop
Add this text at the bottom of the file, save and close.
X-Ayatana-Desktop-Shortcuts=Videos;Documents;Music;Pictures;Downloads
[Videos Shortcut Group]
Name=Videos
Exec=nautilus Videos
TargetEnvironment=Unity
[Documents Shortcut Group]
Name=Documents
Exec=nautilus Documents
TargetEnvironment=Unity
[Music Shortcut Group]
Name=Music
Exec=nautilus Music
TargetEnvironment=Unity
[Pictures Shortcut Group]
Name=Pictures
Exec=nautilus Pictures
TargetEnvironment=Unity
[Downloads Shortcut Group]
Name=Downloads
Exec=nautilus Downloads
TargetEnvironment=Unity
Reboot. It should work now, only one icon, with the quicklist.
If it still doesn't work, you can try Alt+F2, then run
unity --reset-icons
This will reset the icons of the original install on your launchbar, so you will have to repopulate it the way you want.
For getting the original nautilus-home.desktop file back, you can reinstall Nautilus and have the default settings and files:
sudo apt-get install --reinstall nautilus
OK, so; I formatted my HDD again, just to start from scratch again. Here's the whole story:
After successfully installing Ubuntu 11.10 i386 on my Lenovo T400 ThinkPad;
Install dependencies (needed for Google Chrome and Gnome Shell)
sudo apt-get -f install
Install Gnome Shell
sudo apt-get install gnome-shell
Install Gnome Tweak Tool
sudo apt-get install gnome-tweak-tool
Once installed, it should show up as "Advanced Settings" in the menu.
Optional Install Gnome Contacts
Note: not included in Ubuntu, but somehow shows some contacts in DASH as search results; but won't open anything when clicked, unless you install this.
sudo apt-get install gnome-contacts
Optional Install Gnome Sushi (a MacOS X'-ish spacebar file previewer)
sudo apt-get install gnome-sushi
Here's the important part, as of now, if I dare search "hard"... I'll get a mixed bag from hardware apps to other kind of hard stuff I wouldn't want to be shown in there.
So, let's install Activity Log Manager:
After this, I added "the folder" to the "pseudo-blacklist", and no luck. That's because this would only block it out of the Activity Log. Not Dash, and not search.
This one is nothing but the GUI for Zeitgeist.
At this point; nothing has happened. Dash still shows whatever I'd browsed before, and whatever I browse now, will show.
Remove the "recently used" file, and turn it into a folder (right?)
rm ~/.local/share/recently-used.xbel
mkdir ~/.local/share/recently-used.xbel
After this last step; Dash won't shoe your previously browsed files, and, won't show your new browes files, plus, activity log manager won't be tracking whatever you set it to. No more "Recently opened" section in Dash, and now the beautiful Activity Journal will actually be useful!
Done! This actually worked for me, at least has until now (just a couple of hours), hopefully, it'll stay that way. If it stops working, I suppose I'll let you know.
Apparently, Sean Houlihane was right, thanks man.
Best Answer
I personally don't use Unity but if you're looking for a way to hide traces of certain, erm, "activities", you could create another user account that was dedicated to that activity which would have its own Unity cache and settings, so you could go wild and nobody ever need know.
So let's say you have a passion for painting Warhammer 40,000 characters. Obviously you don't want your friends or family suddenly see a picture of a great, big, filthy Space Marine Terminator Chaplain.
Oh yes, he'd do some pretty bad things to your Tyranids.
So you create an account:
tyranidlover
Then when you feel the need to do some Warhammer research, you can just switch users, punch in your hidden username and password and there you are, up to your knuckles in lead-based modelling paint and plastic glue.