OK this flaw / bug in KDE 4.5 and 4.5.1 is exceedingly annoying.

Since the bug is not high priority I am wondering if there is a way to hack in Arrangement "NONE" option for desktop?

While that wont fix the bug it will fix the problem of the desktop auto rearranging everything on the desktop every time a file is added or removed. because it auto sots by what ever the Arrangement setting it. Right now no arrangement or none is not an option but there has got to be a way to add that.

Just not sure where or what need to added?

This would require editing and compilation of the Folder View source code, and potentially other components as well, including libkonq and dolphinpart. Their code can be found at:
http://websvn.kde.org/trunk/KDE/kdebase/apps/

The code can be checked out from:
svn://anonsvn.kde.org/home/kde/trunk/KDE/kdebase/apps/

I have this same problem. It isn't new. A couple releases ago the problem cropped up. Then it was fixed. Now it is back. I'm glad to see it is recognized as a problem. This is exceptionally annoying. I can see how it happened.

It's a tiny problem as far as source code goes but it is a big problem from the point of view of the end users. And it makes it look sort of amateurish.

A quick fix would be appreciated by the millions of us using KDE 4.5.