diff --git a/src/com/android/launcher2/FocusHelper.java b/src/com/android/launcher2/FocusHelper.java
index f030739..967b02f 100644
--- a/src/com/android/launcher2/FocusHelper.java
+++ b/src/com/android/launcher2/FocusHelper.java
@@ -23,6 +23,7 @@
 import android.view.ViewParent;
 import android.widget.TabHost;
 import android.widget.TabWidget;
+import android.widget.TextView;
 
 import com.android.launcher.R;
 
@@ -33,18 +34,25 @@
 /**
  * A keyboard listener we set on all the workspace icons.
  */
-class BubbleTextViewKeyEventListener implements View.OnKeyListener {
-    @Override
+class IconKeyEventListener implements View.OnKeyListener {
     public boolean onKey(View v, int keyCode, KeyEvent event) {
-        return FocusHelper.handleBubbleTextViewKeyEvent((BubbleTextView) v, keyCode, event);
+        return FocusHelper.handleIconKeyEvent(v, keyCode, event);
+    }
+}
+
+/**
+ * A keyboard listener we set on all the workspace icons.
+ */
+class FolderKeyEventListener implements View.OnKeyListener {
+    public boolean onKey(View v, int keyCode, KeyEvent event) {
+        return FocusHelper.handleFolderKeyEvent(v, keyCode, event);
     }
 }
 
 /**
  * A keyboard listener we set on all the hotseat buttons.
  */
-class HotseatBubbleTextViewKeyEventListener implements View.OnKeyListener {
-    @Override
+class HotseatIconKeyEventListener implements View.OnKeyListener {
     public boolean onKey(View v, int keyCode, KeyEvent event) {
         final Configuration configuration = v.getResources().getConfiguration();
         return FocusHelper.handleHotseatButtonKeyEvent(v, keyCode, event, configuration.orientation);
@@ -56,7 +64,6 @@
  * market icon and vice versa.
  */
 class AppsCustomizeTabKeyEventListener implements View.OnKeyListener {
-    @Override
     public boolean onKey(View v, int keyCode, KeyEvent event) {
         return FocusHelper.handleAppsCustomizeTabKeyEvent(v, keyCode, event);
     }
@@ -480,7 +487,6 @@
         final int buttonIndex = parent.indexOfChild(v);
         final int buttonCount = parent.getChildCount();
         final int pageIndex = workspace.getCurrentPage();
-        final int pageCount = workspace.getChildCount();
 
         // NOTE: currently we don't special case for the phone UI in different
         // orientations, even though the hotseat is on the side in landscape mode.  This
@@ -517,7 +523,7 @@
                     // Select the first bubble text view in the current page of the workspace
                     final CellLayout layout = (CellLayout) workspace.getChildAt(pageIndex);
                     final CellLayoutChildren children = layout.getChildrenLayout();
-                    final View newIcon = getBubbleTextViewInDirection(layout, children, -1, 1);
+                    final View newIcon = getIconInDirection(layout, children, -1, 1);
                     if (newIcon != null) {
                         newIcon.requestFocus();
                     } else {
@@ -569,38 +575,41 @@
         return views;
     }
     /**
-     * Private helper method to find the index of the next BubbleTextView in the delta direction.
+     * Private helper method to find the index of the next BubbleTextView or FolderIcon in the 
+     * direction delta.
+     * 
      * @param delta either -1 or 1 depending on the direction we want to search
      */
-    private static View findIndexOfBubbleTextView(ArrayList<View> views, int i, int delta) {
+    private static View findIndexOfIcon(ArrayList<View> views, int i, int delta) {
         // Then we find the next BubbleTextView offset by delta from i
         final int count = views.size();
         int newI = i + delta;
         while (0 <= newI && newI < count) {
             View newV = views.get(newI);
-            if (newV instanceof BubbleTextView) {
+            if (newV instanceof BubbleTextView || newV instanceof FolderIcon) {
                 return newV;
             }
             newI += delta;
         }
         return null;
     }
-    private static View getBubbleTextViewInDirection(CellLayout layout, ViewGroup parent, int i,
+    private static View getIconInDirection(CellLayout layout, ViewGroup parent, int i,
             int delta) {
         final ArrayList<View> views = getCellLayoutChildrenSortedSpatially(layout, parent);
-        return findIndexOfBubbleTextView(views, i, delta);
+        return findIndexOfIcon(views, i, delta);
     }
-    private static View getBubbleTextViewInDirection(CellLayout layout, ViewGroup parent, View v,
+    private static View getIconInDirection(CellLayout layout, ViewGroup parent, View v,
             int delta) {
         final ArrayList<View> views = getCellLayoutChildrenSortedSpatially(layout, parent);
-        return findIndexOfBubbleTextView(views, views.indexOf(v), delta);
+        return findIndexOfIcon(views, views.indexOf(v), delta);
     }
     /**
-     * Private helper method to find the next closest BubbleTextView in the delta direction on the
-     * next line.
+     * Private helper method to find the next closest BubbleTextView or FolderIcon in the direction 
+     * delta on the next line.
+     * 
      * @param delta either -1 or 1 depending on the line and direction we want to search
      */
-    private static View getClosestBubbleTextViewOnLine(CellLayout layout, ViewGroup parent, View v,
+    private static View getClosestIconOnLine(CellLayout layout, ViewGroup parent, View v,
             int lineDelta) {
         final ArrayList<View> views = getCellLayoutChildrenSortedSpatially(layout, parent);
         final CellLayout.LayoutParams lp = (CellLayout.LayoutParams) v.getLayoutParams();
@@ -617,7 +626,8 @@
                 View newV = views.get(index);
                 CellLayout.LayoutParams tmpLp = (CellLayout.LayoutParams) newV.getLayoutParams();
                 boolean satisfiesRow = (lineDelta < 0) ? (tmpLp.cellY < row) : (tmpLp.cellY > row);
-                if (satisfiesRow && newV instanceof BubbleTextView) {
+                if (satisfiesRow &&
+                        (newV instanceof BubbleTextView || newV instanceof FolderIcon)) {
                     float tmpDistance = (float) Math.sqrt(Math.pow(tmpLp.cellX - lp.cellX, 2) +
                             Math.pow(tmpLp.cellY - lp.cellY, 2));
                     if (tmpDistance < closestDistance) {
@@ -639,17 +649,15 @@
     }
 
     /**
-     * Handles key events in a Workspace containing BubbleTextView.
+     * Handles key events in a Workspace containing.
      */
-    static boolean handleBubbleTextViewKeyEvent(BubbleTextView v, int keyCode, KeyEvent e) {
+    static boolean handleIconKeyEvent(View v, int keyCode, KeyEvent e) {
         CellLayoutChildren parent = (CellLayoutChildren) v.getParent();
         final CellLayout layout = (CellLayout) parent.getParent();
         final Workspace workspace = (Workspace) layout.getParent();
         final ViewGroup launcher = (ViewGroup) workspace.getParent();
         final ViewGroup tabs = (ViewGroup) launcher.findViewById(R.id.qsb_bar);
         final ViewGroup hotseat = (ViewGroup) launcher.findViewById(R.id.hotseat);
-        int iconIndex = parent.indexOfChild(v);
-        int iconCount = parent.getChildCount();
         int pageIndex = workspace.indexOfChild(layout);
         int pageCount = workspace.getChildCount();
 
@@ -660,13 +668,13 @@
             case KeyEvent.KEYCODE_DPAD_LEFT:
                 if (handleKeyEvent) {
                     // Select the previous icon or the last icon on the previous page if possible
-                    View newIcon = getBubbleTextViewInDirection(layout, parent, v, -1);
+                    View newIcon = getIconInDirection(layout, parent, v, -1);
                     if (newIcon != null) {
                         newIcon.requestFocus();
                     } else {
                         if (pageIndex > 0) {
                             parent = getCellLayoutChildrenForIndex(workspace, pageIndex - 1);
-                            newIcon = getBubbleTextViewInDirection(layout, parent,
+                            newIcon = getIconInDirection(layout, parent,
                                     parent.getChildCount(), -1);
                             if (newIcon != null) {
                                 newIcon.requestFocus();
@@ -682,13 +690,13 @@
             case KeyEvent.KEYCODE_DPAD_RIGHT:
                 if (handleKeyEvent) {
                     // Select the next icon or the first icon on the next page if possible
-                    View newIcon = getBubbleTextViewInDirection(layout, parent, v, 1);
+                    View newIcon = getIconInDirection(layout, parent, v, 1);
                     if (newIcon != null) {
                         newIcon.requestFocus();
                     } else {
                         if (pageIndex < (pageCount - 1)) {
                             parent = getCellLayoutChildrenForIndex(workspace, pageIndex + 1);
-                            newIcon = getBubbleTextViewInDirection(layout, parent, -1, 1);
+                            newIcon = getIconInDirection(layout, parent, -1, 1);
                             if (newIcon != null) {
                                 newIcon.requestFocus();
                             } else {
@@ -703,7 +711,7 @@
             case KeyEvent.KEYCODE_DPAD_UP:
                 if (handleKeyEvent) {
                     // Select the closest icon in the previous line, otherwise select the tab bar
-                    View newIcon = getClosestBubbleTextViewOnLine(layout, parent, v, -1);
+                    View newIcon = getClosestIconOnLine(layout, parent, v, -1);
                     if (newIcon != null) {
                         newIcon.requestFocus();
                         wasHandled = true;
@@ -715,7 +723,7 @@
             case KeyEvent.KEYCODE_DPAD_DOWN:
                 if (handleKeyEvent) {
                     // Select the closest icon in the next line, otherwise select the button bar
-                    View newIcon = getClosestBubbleTextViewOnLine(layout, parent, v, 1);
+                    View newIcon = getClosestIconOnLine(layout, parent, v, 1);
                     if (newIcon != null) {
                         newIcon.requestFocus();
                         wasHandled = true;
@@ -730,7 +738,7 @@
                     // if there is no previous page
                     if (pageIndex > 0) {
                         parent = getCellLayoutChildrenForIndex(workspace, pageIndex - 1);
-                        View newIcon = getBubbleTextViewInDirection(layout, parent, -1, 1);
+                        View newIcon = getIconInDirection(layout, parent, -1, 1);
                         if (newIcon != null) {
                             newIcon.requestFocus();
                         } else {
@@ -738,7 +746,7 @@
                             workspace.snapToPage(pageIndex - 1);
                         }
                     } else {
-                        View newIcon = getBubbleTextViewInDirection(layout, parent, -1, 1);
+                        View newIcon = getIconInDirection(layout, parent, -1, 1);
                         if (newIcon != null) {
                             newIcon.requestFocus();
                         }
@@ -752,7 +760,7 @@
                     // if there is no previous page
                     if (pageIndex < (pageCount - 1)) {
                         parent = getCellLayoutChildrenForIndex(workspace, pageIndex + 1);
-                        View newIcon = getBubbleTextViewInDirection(layout, parent, -1, 1);
+                        View newIcon = getIconInDirection(layout, parent, -1, 1);
                         if (newIcon != null) {
                             newIcon.requestFocus();
                         } else {
@@ -760,7 +768,7 @@
                             workspace.snapToPage(pageIndex + 1);
                         }
                     } else {
-                        View newIcon = getBubbleTextViewInDirection(layout, parent,
+                        View newIcon = getIconInDirection(layout, parent,
                                 parent.getChildCount(), -1);
                         if (newIcon != null) {
                             newIcon.requestFocus();
@@ -772,7 +780,7 @@
             case KeyEvent.KEYCODE_MOVE_HOME:
                 if (handleKeyEvent) {
                     // Select the first icon on this page
-                    View newIcon = getBubbleTextViewInDirection(layout, parent, -1, 1);
+                    View newIcon = getIconInDirection(layout, parent, -1, 1);
                     if (newIcon != null) {
                         newIcon.requestFocus();
                     }
@@ -782,7 +790,90 @@
             case KeyEvent.KEYCODE_MOVE_END:
                 if (handleKeyEvent) {
                     // Select the last icon on this page
-                    View newIcon = getBubbleTextViewInDirection(layout, parent,
+                    View newIcon = getIconInDirection(layout, parent,
+                            parent.getChildCount(), -1);
+                    if (newIcon != null) {
+                        newIcon.requestFocus();
+                    }
+                }
+                wasHandled = true;
+                break;
+            default: break;
+        }
+        return wasHandled;
+    }
+
+    /**
+     * Handles key events for items in a Folder.
+     */
+    static boolean handleFolderKeyEvent(View v, int keyCode, KeyEvent e) {
+        CellLayoutChildren parent = (CellLayoutChildren) v.getParent();
+        final CellLayout layout = (CellLayout) parent.getParent();
+        final Folder folder = (Folder) layout.getParent();
+        View title = folder.mFolderName;
+
+        final int action = e.getAction();
+        final boolean handleKeyEvent = (action != KeyEvent.ACTION_UP);
+        boolean wasHandled = false;
+        switch (keyCode) {
+            case KeyEvent.KEYCODE_DPAD_LEFT:
+                if (handleKeyEvent) {
+                    // Select the previous icon
+                    View newIcon = getIconInDirection(layout, parent, v, -1);
+                    if (newIcon != null) {
+                        newIcon.requestFocus();
+                    }
+                }
+                wasHandled = true;
+                break;
+            case KeyEvent.KEYCODE_DPAD_RIGHT:
+                if (handleKeyEvent) {
+                    // Select the next icon
+                    View newIcon = getIconInDirection(layout, parent, v, 1);
+                    if (newIcon != null) {
+                        newIcon.requestFocus();
+                    } else {
+                        title.requestFocus();
+                    }
+                }
+                wasHandled = true;
+                break;
+            case KeyEvent.KEYCODE_DPAD_UP:
+                if (handleKeyEvent) {
+                    // Select the closest icon in the previous line
+                    View newIcon = getClosestIconOnLine(layout, parent, v, -1);
+                    if (newIcon != null) {
+                        newIcon.requestFocus();
+                    }
+                }
+                wasHandled = true;
+                break;
+            case KeyEvent.KEYCODE_DPAD_DOWN:
+                if (handleKeyEvent) {
+                    // Select the closest icon in the next line
+                    View newIcon = getClosestIconOnLine(layout, parent, v, 1);
+                    if (newIcon != null) {
+                        newIcon.requestFocus();
+                    } else {
+                        title.requestFocus();
+                    }
+                }
+                wasHandled = true;
+                break;
+            case KeyEvent.KEYCODE_MOVE_HOME:
+                if (handleKeyEvent) {
+                    // Select the first icon on this page
+                    View newIcon = getIconInDirection(layout, parent, -1, 1);
+                    if (newIcon != null) {
+                        newIcon.requestFocus();
+                    }
+                }
+                wasHandled = true;
+                break;
+            case KeyEvent.KEYCODE_MOVE_END:
+                if (handleKeyEvent) {
+                    // Select the last icon on this page
+                    View newIcon = getIconInDirection(layout, parent,
                             parent.getChildCount(), -1);
                     if (newIcon != null) {
                         newIcon.requestFocus();
diff --git a/src/com/android/launcher2/Folder.java b/src/com/android/launcher2/Folder.java
index 71b7081..1b863de 100644
--- a/src/com/android/launcher2/Folder.java
+++ b/src/com/android/launcher2/Folder.java
@@ -93,7 +93,6 @@
     private int[] mEmptyCell = new int[2];
     private Alarm mReorderAlarm = new Alarm();
     private Alarm mOnExitAlarm = new Alarm();
-    private TextView mFolderName;
     private int mFolderNameHeight;
     private Rect mHitRect = new Rect();
     private Rect mTempRect = new Rect();
@@ -101,6 +100,7 @@
     private boolean mDeleteFolderOnDropCompleted = false;
     private boolean mSuppressFolderDeletion = false;
     private boolean mItemAddedBackToSelfViaIcon = false;
+    FolderEditText mFolderName;
 
     private boolean mIsEditingName = false;
     private InputMethodManager mInputMethodManager;
@@ -134,8 +134,11 @@
         if (sHintText == null) {
             sHintText = res.getString(R.string.folder_hint_text);
         }
-
         mLauncher = (Launcher) context;
+        // We need this view to be focusable in touch mode so that when text editing of the folder
+        // name is complete, we have something to focus on, thus hiding the cursor and giving
+        // reliable behvior when clicking the text field (since it will always gain focus on click).
+        setFocusableInTouchMode(true);
     }
 
     @Override
@@ -143,7 +146,8 @@
         super.onFinishInflate();
         mContent = (CellLayout) findViewById(R.id.folder_content);
         mContent.setGridSize(0, 0);
-        mFolderName = (TextView) findViewById(R.id.folder_name);
+        mFolderName = (FolderEditText) findViewById(R.id.folder_name);
+        mFolderName.setFolder(this);
 
         // We find out how tall the text view wants to be (it is set to wrap_content), so that
         // we can allocate the appropriate amount of space for it.
@@ -153,7 +157,6 @@
 
         // We disable action mode for now since it messes up the view on phones
         mFolderName.setCustomSelectionActionModeCallback(mActionModeCallback);
-        mFolderName.setCursorVisible(false);
         mFolderName.setOnEditorActionListener(this);
         mFolderName.setSelectAllOnFocus(true);
         mFolderName.setInputType(mFolderName.getInputType() |
@@ -233,7 +236,6 @@
 
     public void startEditingFolderName() {
         mFolderName.setHint("");
-        mFolderName.setCursorVisible(true);
         mIsEditingName = true;
     }
 
@@ -248,8 +250,11 @@
         // gets saved.
         mInfo.setTitle(mFolderName.getText().toString());
         LauncherModel.updateItemInDatabase(mLauncher, mInfo);
-        mFolderName.setCursorVisible(false);
-        mFolderName.clearFocus();
+
+        // In order to clear the focus from the text field, we set the focus on ourself. This
+        // ensures that every time the field is clicked, focus is gained, giving reliable behavior.
+        requestFocus();
+
         Selection.setSelection((Spannable) mFolderName.getText(), 0, 0);
         mIsEditingName = false;
     }
@@ -320,6 +325,7 @@
         }
 
         mItemsInvalidated = true;
+        updateTextViewFocus();
         mInfo.addListener(this);
 
         if (!sDefaultFolderName.contentEquals(mInfo.title)) {
@@ -410,12 +416,20 @@
                 if (cling != null) {
                     cling.bringToFront();
                 }
+                setFocusOnFirstChild();
             }
         });
         oa.setDuration(mExpandDuration);
         oa.start();
     }
 
+    private void setFocusOnFirstChild() {
+        View firstChild = mContent.getChildAt(0, 0);
+        if (firstChild != null) {
+            firstChild.requestFocus();
+        }
+    }
+
     public void animateClosed() {
         if (!(getParent() instanceof DragLayer)) return;
 
@@ -512,6 +526,7 @@
         CellLayout.LayoutParams lp =
             new CellLayout.LayoutParams(item.cellX, item.cellY, item.spanX, item.spanY);
         boolean insert = false;
+        textView.setOnKeyListener(new FolderKeyEventListener());
         mContent.addViewToCellLayout(textView, insert ? 0 : -1, (int)item.id, lp, true);
         return true;
     }
@@ -842,6 +857,7 @@
         parent.removeView(this);
         mDragController.removeDropTarget((DropTarget) this);
         clearFocus();
+        mFolderIcon.requestFocus();
 
         if (mRearrangeOnClose) {
             setupContentForNumItems(getItemCount());
@@ -888,6 +904,19 @@
         }
     }
 
+    // This method keeps track of the last item in the folder for the purposes
+    // of keyboard focus
+    private void updateTextViewFocus() {
+        View lastChild = getItemAt(getItemCount() - 1);
+        getItemAt(getItemCount() - 1);
+        if (lastChild != null) {
+            mFolderName.setNextFocusDownId(lastChild.getId());
+            mFolderName.setNextFocusRightId(lastChild.getId());
+            mFolderName.setNextFocusLeftId(lastChild.getId());
+            mFolderName.setNextFocusUpId(lastChild.getId());
+        }
+    }
+
     public void onDrop(DragObject d) {
         ShortcutInfo item;
         if (d.dragInfo instanceof ApplicationInfo) {
@@ -963,7 +992,9 @@
     }
 
     public void onItemsChanged() {
+        updateTextViewFocus();
     }
+
     public void onTitleChanged(CharSequence title) {
     }
 
diff --git a/src/com/android/launcher2/FolderEditText.java b/src/com/android/launcher2/FolderEditText.java
new file mode 100644
index 0000000..13169bd
--- /dev/null
+++ b/src/com/android/launcher2/FolderEditText.java
@@ -0,0 +1,36 @@
+package com.android.launcher2;
+
+import android.content.Context;
+import android.util.AttributeSet;
+import android.view.KeyEvent;
+import android.widget.EditText;
+
+public class FolderEditText extends EditText {
+
+    private Folder mFolder;
+
+    public FolderEditText(Context context) {
+        super(context);
+    }
+
+    public FolderEditText(Context context, AttributeSet attrs) {
+        super(context, attrs);
+    }
+
+    public FolderEditText(Context context, AttributeSet attrs, int defStyle) {
+        super(context, attrs, defStyle);
+    }
+
+    public void setFolder(Folder folder) {
+        mFolder = folder;
+    }
+
+    @Override
+    public boolean onKeyPreIme(int keyCode, KeyEvent event) {
+        // Catch the back button on the soft keyboard so that we can just close the activity
+        if (event.getKeyCode() == android.view.KeyEvent.KEYCODE_BACK) {
+            mFolder.doneEditingFolderName(true);
+        }
+        return super.onKeyPreIme(keyCode, event);
+    }
+}
diff --git a/src/com/android/launcher2/FolderInfo.java b/src/com/android/launcher2/FolderInfo.java
index 3ae31d2..f597076 100644
--- a/src/com/android/launcher2/FolderInfo.java
+++ b/src/com/android/launcher2/FolderInfo.java
@@ -56,6 +56,7 @@
         for (int i = 0; i < listeners.size(); i++) {
             listeners.get(i).onAdd(item);
         }
+        itemsChanged();
     }
 
     /**
@@ -68,6 +69,7 @@
         for (int i = 0; i < listeners.size(); i++) {
             listeners.get(i).onRemove(item);
         }
+        itemsChanged();
     }
 
     public void setTitle(CharSequence title) {
diff --git a/src/com/android/launcher2/Hotseat.java b/src/com/android/launcher2/Hotseat.java
index b9be6dc..85412c6 100644
--- a/src/com/android/launcher2/Hotseat.java
+++ b/src/com/android/launcher2/Hotseat.java
@@ -58,7 +58,7 @@
 
     public void setup(Launcher launcher) {
         mLauncher = launcher;
-        setOnKeyListener(new HotseatBubbleTextViewKeyEventListener());
+        setOnKeyListener(new HotseatIconKeyEventListener());
     }
 
     CellLayout getLayout() {
diff --git a/src/com/android/launcher2/Launcher.java b/src/com/android/launcher2/Launcher.java
index 2997d68..02fccc5 100644
--- a/src/com/android/launcher2/Launcher.java
+++ b/src/com/android/launcher2/Launcher.java
@@ -1147,16 +1147,18 @@
             // also will cancel mWaitingForResult.
             closeSystemDialogs();
 
-            closeFolder();
-
             boolean alreadyOnHome = ((intent.getFlags() & Intent.FLAG_ACTIVITY_BROUGHT_TO_FRONT)
                         != Intent.FLAG_ACTIVITY_BROUGHT_TO_FRONT);
 
+            Folder openFolder = mWorkspace.getOpenFolder();
             // In all these cases, only animate if we're already on home
             mWorkspace.exitWidgetResizeMode();
-            if (alreadyOnHome && mState == State.WORKSPACE && !mWorkspace.isTouchActive()) {
+            if (alreadyOnHome && mState == State.WORKSPACE && !mWorkspace.isTouchActive() &&
+                    openFolder == null) {
                 mWorkspace.moveToDefaultScreen(true);
             }
+
+            closeFolder();
             exitSpringLoadedDragMode();
             showWorkspace(alreadyOnHome);
 
@@ -1876,6 +1878,9 @@
     public void closeFolder() {
         Folder folder = mWorkspace.getOpenFolder();
         if (folder != null) {
+            if (folder.isEditingName()) {
+                folder.dismissEditingName();
+            }
             closeFolder(folder);
 
             // Dismiss the folder cling
diff --git a/src/com/android/launcher2/Workspace.java b/src/com/android/launcher2/Workspace.java
index bf18456..44c533b 100644
--- a/src/com/android/launcher2/Workspace.java
+++ b/src/com/android/launcher2/Workspace.java
@@ -469,7 +469,7 @@
             }
 
             layout = (CellLayout) getChildAt(screen);
-            child.setOnKeyListener(new BubbleTextViewKeyEventListener());
+            child.setOnKeyListener(new IconKeyEventListener());
         }
 
         CellLayout.LayoutParams lp = (CellLayout.LayoutParams) child.getLayoutParams();