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Again, I'm running natty in classic mode.

When I right click on the desktop, I get a practically useless menu that goes like

Create Folder
Create Launcher
Organize Desktop by name...

I would like to edit this menu. Note: nautilus-open-terminal is insufficient for my needs because I want to open xterms up.

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@Rinzwind let us continue this discussion in chat – Owen Maresh Jun 21 '11 at 7:24

We are unable to remove the default menu entries in Nautilus. However by using Nautilus Scripts we may add any script located in ~/.gnome2/nautilus-scripts/ to the right click context menu:

enter image description here

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