I am sorry about your messed up Desktop. While there can be many possible problems that result in such behavior, the cause seems quite obvious: When you installed the newer version of KDE (by the way: which way of installing did you chose? up2date? 3rd party rpms?) your Desktop setup was deleted (i.e. replaced with a blank directory). The probable cause is that the RPMs you used were not, am, good
. Can you add new icons to your desktop? If so, you will have to reconfigure your desktop and forget about the issue.
If this is not possible, this is part of a larger problem and we will need to investigate what the problem is further. Please in your next post give as much information on the problem as you can (errors, graphical weirdnesses, ...)
As for the Open Terminal on the desktop context menu: The reason why it's not there anymore is that it is not supposed to be. There was some cleaning up of context menus prior to the kde 3.2 release IIRC.
You can see an example of further changes, when you right click in a folder (in konqueror). The menu will not show "open terminal here" and the likes anymore either. Instead, they have moved to the new Actions submenu (which is not there for the Desktop, because the Desktop is not supposed to be an ordinary folder, but a place to start working at not work with).
Unfortunately the advise I would have to give you is: Configure your desktop again and get over the missing terminal option in the context menu. Believe me, once you get used to it, you'll like it better. (You can add a terminal button to kicker, if you wish.)
Sorry, good luck,
I forgot to mention the log off problem you described. The reason for this seems to be that Fedora is using the GDM (as opposed to the KDM), which KDE cannot use to handle the reboot, shutdown requests. Therefore there is only a log off option which quits KDE. I am very surprised that there was such an option before. Maybe Fedora patched the KDE installation you replaced to be able to work with GDM? I dont think so though. This wasnt the case when I last used Fedora (which fortunately was quite some time ago).