Hmm--I've noticed that OSX doesn't update the desktop folder icons as often as I'd expect, but they do show up in GraphicConverter's Browse!

What about designating another folder as your Save folder on the same partition as the home folder? There were some problems with iMovie and the like with external firewire drives, but I thought those were fixed.

As for the file corruption, sometimes the files are just fine, but the error message can be triggered by a slow hash update from the host computer.

The LW crew just released 2.9.11 in time for the weekend, so maybe that will help. Occasionally I've reinstalled java (fixes the could not move to library message for me), so that's another possibility.