Limnos: I never use "keep arranged by" because i want the icons to be where i put them, or else just at the bottom. And i am not talking about when the drive (i.e. its window) is open--I am talking about when you drag a file to the drive's icon on the desktop. Or when you type Cmd+shift+N, you are not specifically putting the new folder anywhere--the OS does it.
Michael: yes i'm talking about regular icons view. To replicate this problem, you need to have LOTS of files (and/or folders) on a hard drive, arranged essentially in a tall narrow arrangement, a few files/icons wide. The problem doesn't appear until you have a rather tall [narrow] arrangement to your drive's window, As you say, when you drag a file to a drive's icon (to copy it to the drive), it *should* be placed at the very bottom, but once you have enough files on that drive (100 or so--it doesn't need to be terribly tall), i.e. when the OS apparently perceives that the drive's window is unpleasantly tall (to the stupid code that is OSX), it starts placing them off-window to the right at the *very top* of the window instead of at the bottom. It does this even if there is open space for icons elsewhere in the drive's window, e.g. if you deleted some things. This forces you to scroll all the way up to the top, over to the right, then drag the new icon all the way down to the bottom. At least in OS 10.4.11 it does this.
Btw, I rant about OSX because it is a bloody twisted obscenity (hi, Apple!). Excruciatingly unpleasant to use, far less intuitive than OS9 and only slightly more stable. Just now, it let me type almost the whole 1st paragraph above before realizing that no chars were actually appearing even though there was a flashing cursor in the text box! And when i click on "Add Reply" below, it will fail and force me to go to the advanced editor, every time, and just now, it stopped typing again for about half a sentence (and i had to re-type it). And this javascript (or whatever) text editor is so slow it's almost unusable. That can only be because it's poorly written, i.e. html bloatware.