diff --git a/OpenSim/Region/CoreModules/ServiceConnectorsOut/Inventory/LocalInventoryServiceConnector.cs b/OpenSim/Region/CoreModules/ServiceConnectorsOut/Inventory/LocalInventoryServiceConnector.cs
index 3de6e5cb49..350ad66457 100644
--- a/OpenSim/Region/CoreModules/ServiceConnectorsOut/Inventory/LocalInventoryServiceConnector.cs
+++ b/OpenSim/Region/CoreModules/ServiceConnectorsOut/Inventory/LocalInventoryServiceConnector.cs
@@ -216,16 +216,28 @@ namespace OpenSim.Region.CoreModules.ServiceConnectorsOut.Inventory
             return m_InventoryService.PurgeFolder(folder);
         }
 
-        /// <summary>
-        /// Add a new item to the user's inventory
-        /// </summary>
-        /// <param name="item"></param>
-        /// <returns>true if the item was successfully added</returns>
         public bool AddItem(InventoryItemBase item)
         {
             m_log.DebugFormat(
                 "[LOCAL INVENTORY SERVICES CONNECTOR]: Adding inventory item {0} to user {1} folder {2}", 
                 item.Name, item.Owner, item.Folder);            
+
+            if (UUID.Zero == item.Folder)
+            {
+                InventoryFolderBase f = m_InventoryService.GetFolderForType(item.Owner, (AssetType)item.AssetType);
+                if (f != null)
+                {
+                    item.Folder = f.ID;
+                }
+                else
+                {
+                    f = m_InventoryService.GetRootFolder(item.Owner);
+                    if (f != null)
+                        item.Folder = f.ID;
+                    else
+                        return false;
+                }
+            }
             
             return m_InventoryService.AddItem(item);
         }
diff --git a/OpenSim/Region/CoreModules/ServiceConnectorsOut/Inventory/RemoteXInventoryServiceConnector.cs b/OpenSim/Region/CoreModules/ServiceConnectorsOut/Inventory/RemoteXInventoryServiceConnector.cs
index 277060d2aa..62ed7bec34 100644
--- a/OpenSim/Region/CoreModules/ServiceConnectorsOut/Inventory/RemoteXInventoryServiceConnector.cs
+++ b/OpenSim/Region/CoreModules/ServiceConnectorsOut/Inventory/RemoteXInventoryServiceConnector.cs
@@ -295,9 +295,6 @@ namespace OpenSim.Region.CoreModules.ServiceConnectorsOut.Inventory
             return m_RemoteConnector.GetAssetPermissions(userID, assetID);
         }
 
-
         #endregion
-
-
     }
-}
+}
\ No newline at end of file
diff --git a/OpenSim/Region/ScriptEngine/Shared/Api/Implementation/LSL_Api.cs b/OpenSim/Region/ScriptEngine/Shared/Api/Implementation/LSL_Api.cs
index f767c648b7..945100526c 100644
--- a/OpenSim/Region/ScriptEngine/Shared/Api/Implementation/LSL_Api.cs
+++ b/OpenSim/Region/ScriptEngine/Shared/Api/Implementation/LSL_Api.cs
@@ -3837,18 +3837,16 @@ namespace OpenSim.Region.ScriptEngine.Shared.Api
             if (World.GetScenePresence(destId) != null)
             {
                 // destination is an avatar
-                InventoryItemBase agentItem =
-                        World.MoveTaskInventoryItem(destId, UUID.Zero, m_host, objId);
+                InventoryItemBase agentItem = World.MoveTaskInventoryItem(destId, UUID.Zero, m_host, objId);
 
                 if (agentItem == null)
                     return;
 
                 byte[] bucket = new byte[17];
                 bucket[0] = (byte)assetType;
-                byte[] objBytes = objId.GetBytes();
+                byte[] objBytes = agentItem.ID.GetBytes();
                 Array.Copy(objBytes, 0, bucket, 1, 16);
 
-                Console.WriteLine("Giving inventory");
                 GridInstantMessage msg = new GridInstantMessage(World,
                         m_host.UUID, m_host.Name+", an object owned by "+
                         resolveName(m_host.OwnerID)+",", destId,
diff --git a/OpenSim/Services/Interfaces/IInventoryService.cs b/OpenSim/Services/Interfaces/IInventoryService.cs
index 1b78fb3912..d19faeddf7 100644
--- a/OpenSim/Services/Interfaces/IInventoryService.cs
+++ b/OpenSim/Services/Interfaces/IInventoryService.cs
@@ -141,8 +141,11 @@ namespace OpenSim.Services.Interfaces
         /// <summary>
         /// Add a new item to the user's inventory
         /// </summary>
-        /// <param name="item"></param>
-        /// <returns>true if the item was successfully added</returns>
+        /// <param name="item">
+        /// The item to be added.  If item.FolderID == UUID.Zero then the item is added to the most suitable system
+        /// folder.  If there is no suitable folder then the item is added to the user's root inventory folder.
+        /// </param>
+        /// <returns>true if the item was successfully added, false if it was not</returns>
         bool AddItem(InventoryItemBase item);
 
         /// <summary>
diff --git a/OpenSim/Services/InventoryService/XInventoryService.cs b/OpenSim/Services/InventoryService/XInventoryService.cs
index 90a5c225a0..84306e7296 100644
--- a/OpenSim/Services/InventoryService/XInventoryService.cs
+++ b/OpenSim/Services/InventoryService/XInventoryService.cs
@@ -219,12 +219,21 @@ namespace OpenSim.Services.InventoryService
 
         public virtual InventoryFolderBase GetFolderForType(UUID principalID, AssetType type)
         {
+//            m_log.DebugFormat("[XINVENTORY SERVICE]: Getting folder type {0} for user {1}", type, principalID);
+            
             XInventoryFolder[] folders = m_Database.GetFolders(
                     new string[] { "agentID", "type"},
                     new string[] { principalID.ToString(), ((int)type).ToString() });
 
             if (folders.Length == 0)
+            {
+//                m_log.WarnFormat("[XINVENTORY SERVICE]: Found no folder for type {0} for user {1}", type, principalID);
                 return null;
+            }
+            
+//            m_log.DebugFormat(
+//                "[XINVENTORY SERVICE]: Found folder {0} {1} for type {2} for user {3}", 
+//                folders[0].folderName, folders[0].folderID, type, principalID);
 
             return ConvertToOpenSim(folders[0]);
         }
@@ -235,7 +244,7 @@ namespace OpenSim.Services.InventoryService
             // connector. So we disregard the principal and look
             // by ID.
             //
-            m_log.DebugFormat("[XINVENTORY]: Fetch contents for folder {0}", folderID.ToString());
+            m_log.DebugFormat("[XINVENTORY SERVICE]: Fetch contents for folder {0}", folderID.ToString());
             InventoryCollection inventory = new InventoryCollection();
             inventory.UserID = principalID;
             inventory.Folders = new List<InventoryFolderBase>();
@@ -354,6 +363,9 @@ namespace OpenSim.Services.InventoryService
 
         public virtual bool AddItem(InventoryItemBase item)
         {
+//            m_log.DebugFormat(
+//                "[XINVENTORY SERVICE]: Adding item {0} to folder {1} for {2}", item.ID, item.Folder, item.Owner);
+            
             return m_Database.StoreItem(ConvertFromOpenSim(item));
         }