That's the reason why! You should have created a shortcut to the folder in documents and settings. So probably, the files are still going to the folder in documents and settings but not to the one on the desktop. Your OS & LW are probably a little confused.

To double-check your settings for LW are OK: whilst LW is open, go to LW menu Tools-Options & Saving & make sure your LW dwnld folder is in documents and settings (reselect the folder again to be on the safe side!) Now still within the Options window go to Sharing & add this folder again as a shared folder. Don't forget if you change anything within LW's settings to press BOTH the Apply & OK buttons each time. Now go to LW's Library & press the Refresh button. Now you'll see the shared folders to the top-left of the window. Click onto a folder (if it has a small arrow to the left of the name, click this to open it) & then click onto any song name. Now you can press launch.

In your finder, click onto the LW dwnld folder in documents and settings & then go to File & choose Create Shortcut. This shortcut can be located onto the desktop. This is a link to the original folder so it gives you easy & quick access. (If you change the dwnld folder to the desktop, your incomplete folder will also probably be there.)

If you're still having probs then write back to this thread. Hope this solves your issues.