diff -Nuard gnome-panel-2.6.2.orig/gnome-panel/menu-fentry.c gnome-panel-2.6.2/gnome-panel/menu-fentry.c
--- gnome-panel-2.6.2.orig/gnome-panel/menu-fentry.c	2004-08-10 23:56:37.227039128 +0200
+++ gnome-panel-2.6.2/gnome-panel/menu-fentry.c	2004-08-10 23:57:03.744007936 +0200
@@ -750,6 +750,8 @@
 	} else if (fra->type != FILE_REC_DIR && frb->type == FILE_REC_DIR) {
 		return 1;
 	}
+	
+
 
 	if (fra->name_collate_key == NULL) {
 		fra->name_collate_key = g_utf8_collate_key (sure_string (fra->fullname), -1);
@@ -757,5 +759,9 @@
 	if (frb->name_collate_key == NULL) {
 		frb->name_collate_key = g_utf8_collate_key (sure_string (frb->fullname), -1);
 	}
-        return strcmp (fra->name_collate_key, frb->name_collate_key);
+
+	if (fra->type == FILE_REC_DIR && frb->type == FILE_REC_DIR)
+    		return strcmp (fra->name, frb->name);
+	else
+        	return strcmp (fra->name_collate_key, frb->name_collate_key);
 }