The type used for folders in gnome (x-directory/normal) is not in the new mime info database. This means that for folders the name "x-directory/normal" is shown in the ui instead of "Folder". I'm not sure what the best thing to do here is. We probably should add it as an alias to x-directory/normal and make sure gnome-vfs can get the right description for aliases.
(The shared-mime-info mimetype for folders is inode/directory)
I'm trying a hack for this for now.
hack posted to release-team
fix in upstream
2.8.1 has this fix.