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This has bugged me ever since OS 8. But I've just kept my old habit I got from System 7: I use my own "Documents" folder that lives on my desktop. I never use the default Documents folder at all.
My entire organization structure is desktop-based, not Home-based. Coming from System 7, it just makes more sense to me that way, although OS X clearly doesn't want to be treated that way (click on the Finder in the Dock, and what happens? The freakin' Home folder pops up!).
It's especially annoying since there's no real rhyme or reason to what goes there as opposed to the Preferences or Application Support folders.
So yes, I too have been forced to surrender that folder to the barbarian apps.
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