In Snow Leopard if I put a File from Desktop to the wrong Folder, and pressed UNDO, the File would leap back to my desktop and I could then place it into the correct Folder.

Now, it just undoes, on a screenshot, a carefully typed name I've given it, to something like "Screen Shot 2011-08-28 at 12.03.54 AM" and leaves it in the wrong folder.

Can I get the old behaviour back in LION???

Never Mind - - - I just click on the desktop to make sure it is selected

If the screenshot is selected UNDO affects the name given to the screenshot.