Well, I have bad news, I am afraid. Having updated from the testing media, I logged out and logged in again. All seemed OK. So I switched to Default Desktop and noted that it still had the same background image as the Folder View. So I changed the background to solid colour and switched back to Folder View. Guess what? My icons are still there, but all sotred by name on the left hand side and no "unsorted" option on either of the two pull-down menus for icon sorting.

Yet looking at my plasma-desktop-appletsrc, I observe "sortColumn=-1".
This, BTW, on the machine which previously did NOT have icons problems. Haven't had a chance to try it on the one that did (it's in use by my better half

).
NB: "Align to grid" setting got uset too.