I rearranged my desktop recently and have now concluded that I like this layout:

Presenting ... Tim's Really Useful Desktop - the guided tour
Starting on the left side of the screen, and working clockwise...
1. Since I have a Powerbook and it's wide-aspect screen, I moved my Dock to the left side. I use it solely as a list of running apps - I don't keep any commonly-used apps permanently in the Dock - if I need to launch something regularly I use Butler.
2. The Konfabulator widgets are, from left to right and top to bottom: iTunes Bar, The Weather, mini Calendar, FTP Mini, WhoDoesWhat, one-liner, upTimeRecord, SiteCheck, mini Digital Clock, and Word of the Day (all available from the Konfabulator Galley). I also use the National Rail timetable widget when I'm catching a train later in the day. In my opinion most of these widgets exemplify the virtues of Konfabulator - they look good and display some regularly updated information in an easily seen place (use Expose to get windows out of the way if necessary). SiteCheck, which simply carries out periodic checks to see if a specified website is responding, and Word of the Day, which updates once a day to display a new word and its definition, are two great examples.
3. My menubar contains, from left to right: the Konfabulator menu, iClock, the Bluetooth menu, MUMenu, the Modem menu, all four MenuMeters modules (modem throughput, memory usage, disk usage, and CPU load), the Battery menu, the Keyboard layout menu, the Eject menu, the Volume menu, and the WinSwitch FUS menu.
4. The two white windows near the center of the screen are Butler windows. The big one is the launcher window (it fades out once you launch something, in the image it is awaiting keyboard input). The lower one is the iTunes track window. This fades in when a new song starts and displays the track name before fading out again. I had to be quick with the screenshot before it faded out
5. On the right is a DragThing dock, configured to have no tabs and to automatically hide. In the image the mouse is on the right edge of the screen, so the dock has expanded and become visible. Move the mouse away and the dock shrinks back into the edge of the screen. I use this as my 'drop box' dock. It's full of drag-and-drop apps (think Stuffit Expander) and various folders that I often move items to.
6. On the bottom of the screen is another DragThing dock, this one configured with tabs and ten layers and also set to automatically hide. Each layer is labeled Applications, Utilities, Internet, etc. This is my secondary app launcher. Almost every app in my Applications folder is also in this dock. Having them categorised sometimes helps me find what I want, especially if I cannot remember the app's name (my Applications folder currently contains 322 items). In the image the dock is minimised, since the mouse is over on the right edge of the screen.
This layout has been a pleasure to use so far. Some of the Konfabulator widgets might go (the upTime module hasn't been particularly useful!), and although I previously used MUMenu on a daily basis I now use NetNewsWire to keep abreast of new releases along with regular news, so that will probably go too. Other than that, to quote Ronald McDonald: "I'm lovin' it"