Problems when disabling user directories as per http://drupal.org/node/307016

Using the settings outlined in the first post to prevent creation of user directories seems to have the following consequences at least in asset 1.0 (the official release):

• If I am uid1 (or a role with admin permissions using the admin role module), all is fine. But, for any other user, the image displays as a file attachment on the node even when that user has create assets and create upload assets permissions. I thought it was because I was using the masquerade module, but even when logging in directly as the user, the problem persists.
• For both admin user and a normal user, asset module does not list all the files uploaded to the 'files' directory.
• For user with admin permissions, the wizard still displays directory icons with user names but nothing happens when clicking them. This is quite confusing.

Screenshots attached:

1. Logged in with admin permissions
2. Logged in as the user
3. Files listed in asset wizard for both admin user and users with assets permissions
4. Files actually uploaded to 'files' folder
5. Directory icons with user names still displayed

I also noticed what seems to be a bug in asset wizard where it says that the file has been uploaded, but checking the files directory in shell, I found the upload isn't completed until the entire wizard is run. May be I should submit a separate ticket for that.

I am not sure how many of these are unintended consequences of uncommenting the code, but the first issue of the asset showing as a file attachment on the node is bad enough to be a show stopper :(