ok dont know if you have all this figured out as of yet but that new plist file you put up fixed me back to normal.

Anywayz...here's where me problem came in:
All on a 1.1.1 jailbroken phone w/ customize installed
Installed Categories
Created Games Folder and added about 5 games
Created Utilites Folder and added about 10 utilities
On the home screen I noticed that some of the utilities were still on the home screen and also inside of the folders.
Decided to uninstall.
Homescreen still showed the two folders but also the icons were inside still and now all on homescreen.
Removed the Games.app and Utilities.app through MobileFinder and rebooted and BAM! Notta on my homescreen.
Hope this helps you figure it out, i'm sure part of it was my stupidity for not just asking first and just deleting those somehow.
Jayman11
Also just noticed after going into customize to reorder my icons again.....there is still a utuilites item on there, no icon next to it or anything but it's still there after the new plist.
Jayman11