The irony of your reply is that it is the thread I started back in F14 and referred to in my initial post.
Gnome 3 and F16 has broken all that.
I got the launcher to appear in the Activities/Applications list. I just added the desktop file below to ~/.local/share/applications
However, I cannot figure out how to drag and drop an object onto it.
If I click on something (a link in FireFox) and drag it up to the Activities menu, I cannot access the Applications list without releasing the mouse button and losing the object I am dragging.