Resolution you are running at is 800x480, which is quite low. I've tried running at both 800x600 and 640x480 to try to reproduce this but have been unable to so far. If you run gnome-display-properties (alt-f2 to run it if you can't click the icon) and switch to another resolution, and possibly even switch back, what happens? Does it correct itself, or do the icons still overlap?
Resolution you are running at is 800x480, which is quite low. I've tried running at both 800x600 and 640x480 to try to reproduce this but have been unable to so far. If you run gnome-display- properties (alt-f2 to run it if you can't click the icon) and switch to another resolution, and possibly even switch back, what happens? Does it correct itself, or do the icons still overlap?