Folders not showing on desktop

If any application creates a folder on the desktop (or files for that matter) they are not displaying! However, if I recreate the folder through the relevant app it shows up in the dialog, but still not on the desktop. One example is if I export a bunch of photos from iPhoto and create a new directory on the desktop, the export happens but no folder appears.

I can click on the desktop and create a new folder and it shows okay straight away.