Desktop opens with Terminal

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Oct 25, 2012
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I have no idea how this happened, but when I open desktop in finder, it opens with the Terminal application. When I look at it, it says desktop is a package instead of a folder. This presents problems i.e. cant drag and drop, Can't create a new folder, dashboard and launchpad malfunction.
How do I get me desktop back to its original form?
Macbook Pro/ Mountain Lion
 

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