diff --git a/nautilus-2.16.2-icons-overlap-revert.patch b/nautilus-2.16.2-icons-overlap-revert.patch
new file mode 100644
index 0000000..0096f96
--- /dev/null
+++ b/nautilus-2.16.2-icons-overlap-revert.patch
@@ -0,0 +1,117 @@
+--- nautilus-2.16.2/libnautilus-private/nautilus-icon-container.c.icons	2006-11-07 10:22:42.000000000 +0100
++++ nautilus-2.16.2/libnautilus-private/nautilus-icon-container.c	2006-11-08 11:23:30.000000000 +0100
+@@ -287,8 +287,6 @@
+ 	int x1, y1, x2, y2;
+ 	int container_x, container_y, container_width, container_height;
+ 
+-	icon->has_lazy_position = FALSE;
+-
+ 	if (icon->x == x && icon->y == y) {
+ 		return;
+ 	}
+@@ -349,7 +347,7 @@
+ 	if (icon->y == ICON_UNPOSITIONED_VALUE) {
+ 		icon->y = 0;
+ 	}
+-
++	
+ 	eel_canvas_item_move (EEL_CANVAS_ITEM (icon->item),
+ 				x - icon->x,
+ 				y - icon->y);
+@@ -5735,13 +5733,9 @@
+ 	new_icons = g_list_reverse (new_icons);
+ 	no_position_icons = semi_position_icons = NULL;
+ 	for (p = new_icons; p != NULL; p = p->next) {
+-		gboolean has_lazy_position;
+-
+ 		icon = p->data;
+-		has_lazy_position = icon->has_lazy_position;
+-
+                 if (assign_icon_position (container, icon)) {
+-			if (!container->details->is_reloading && !container->details->auto_layout && has_lazy_position) {
++                        if (!container->details->auto_layout && icon->has_lazy_position) {
+                                 semi_position_icons = g_list_prepend (semi_position_icons, icon);
+                         }
+                 } else {
+@@ -5774,7 +5768,6 @@
+ 		for (p = semi_position_icons; p != NULL; p = p->next) {
+ 			NautilusIcon *icon;
+ 			int x, y;
+-			NautilusIconPosition position;
+ 
+ 			icon = p->data;
+ 			x = icon->x;
+@@ -5787,10 +5780,9 @@
+ 
+ 			placement_grid_mark_icon (grid, icon);
+ 
+-			position.x = icon->x;
+-			position.y = icon->y;
+-			g_signal_emit (container, signals[ICON_POSITION_CHANGED], 0,
+-				       icon->data, &position);
++			/* ensure that next time we run this code, the formerly semi-positioned
++			 * icons are treated as being positioned. */
++			icon->has_lazy_position = FALSE;
+ 		}
+ 
+ 		placement_grid_free (grid);
+@@ -6690,15 +6682,6 @@
+ 	}
+ }
+ 
+-void
+-nautilus_icon_container_set_is_reloading (NautilusIconContainer *container,
+-					  gboolean               is_reloading)
+-{
+-	g_return_if_fail (NAUTILUS_IS_ICON_CONTAINER (container));
+-
+-	container->details->is_reloading = is_reloading;
+-}
+-
+ gboolean
+ nautilus_icon_container_is_auto_layout (NautilusIconContainer *container)
+ {
+--- nautilus-2.16.2/src/file-manager/fm-icon-view.c.icons	2006-11-07 10:22:42.000000000 +0100
++++ nautilus-2.16.2/src/file-manager/fm-icon-view.c	2006-11-08 11:23:29.000000000 +0100
+@@ -531,12 +531,22 @@
+ file_has_lazy_position (FMDirectoryView *view,
+ 			NautilusFile *file)
+ {
++	gboolean lazy_position;
++
+ 	/* For volumes (i.e. cdrom icon) we use lazy positioning so that when
+ 	 * an old cdrom gets re-mounted in a place that now has another
+-	 * icon we don't overlap that one.
++	 * icon we don't overlap that one. We don't do this in general though,
++	 * as it can cause icons moving around.
+ 	 */
++	lazy_position = nautilus_file_has_volume (file);
++	if (lazy_position && fm_directory_view_get_loading (view)) {
++		/* if volumes are loaded during directory load, don't mark them
++		 * as lazy. This is wrong for files that were mounted during user
++		 * log-off, but it is right for files that were mounted during login. */
++		lazy_position = FALSE;
++	}
+ 
+-	return NAUTILUS_IS_DESKTOP_ICON_FILE (file);
++	return lazy_position;
+ }
+ 
+ static void
+@@ -1082,8 +1092,6 @@
+ 	file = fm_directory_view_get_directory_as_file (view);
+ 	icon_container = GTK_WIDGET (get_icon_container (icon_view));
+ 
+-	nautilus_icon_container_set_is_reloading (NAUTILUS_ICON_CONTAINER (icon_container), TRUE);
+-
+ 	nautilus_icon_container_set_allow_moves (NAUTILUS_ICON_CONTAINER (icon_container),
+ 						 fm_directory_view_get_allow_moves (view));
+ 
+@@ -1158,7 +1166,6 @@
+ 	FMIconView *icon_view;
+ 
+ 	icon_view = FM_ICON_VIEW (view);
+-	nautilus_icon_container_set_is_reloading (get_icon_container (icon_view), FALSE);
+ }
+ 
+ static NautilusZoomLevel
diff --git a/nautilus.spec b/nautilus.spec
index a8ae91a..406d97f 100644
--- a/nautilus.spec
+++ b/nautilus.spec
@@ -24,7 +24,7 @@
 Name:		nautilus
 Summary:        Nautilus is a file manager for GNOME.
 Version: 	2.16.2
-Release:	2%{?dist}
+Release:	4%{?dist}
 License: 	GPL
 Group:          User Interface/Desktops
 Source: 	ftp://ftp.gnome.org/pub/GNOME/sources/2.7/%{name}/%{name}-%{version}.tar.bz2
@@ -89,6 +89,7 @@ Patch1:         nautilus-2.5.7-rhconfig.patch
 Patch2:         nautilus-2.15.2-format.patch
 Patch3:		background-no-delay.patch
 Patch5:		nautilus-2.16.2-selinux.patch
+Patch7:		nautilus-2.16.2-icons-overlap-revert.patch
 
 %description
 Nautilus integrates access to files, applications, media,
@@ -121,6 +122,7 @@ for writing nautilus extensions.
 %patch2 -p1 -b .format
 %patch3 -p1 -b .no-delay
 %patch5 -p1 -b .selinux
+%patch7 -p1 -b .icons-overlap-revert
 
 %build
 
@@ -214,6 +216,9 @@ scrollkeeper-update
 %{_libdir}/*.so
 
 %changelog
+* Wed Nov  8 2006 Alexander Larsson <alexl@redhat.com> - 2.16.2-4.fc7
+- Revert upstream icon placement patch as it seems broken
+
 * Tue Nov  7 2006 Alexander Larsson <alexl@redhat.com> - 2.16.2-2.fc7
 - Update to 2.16.2