diff --git a/src/app-utils/gnc-ui-util.c b/src/app-utils/gnc-ui-util.c
index 5ec02cee26..8744cd066d 100644
--- a/src/app-utils/gnc-ui-util.c
+++ b/src/app-utils/gnc-ui-util.c
@@ -174,30 +174,22 @@ gnc_reverse_balance (const Account *account)
 }
 
 
-void
-gnc_init_default_directory (char **dirname)
+gchar *
+gnc_get_default_directory (const gchar *gconf_section)
 {
-  if (*dirname == NULL)
-    *dirname = g_strdup_printf("%s/", g_get_home_dir());
+  gchar *dir;
+
+  dir = gnc_gconf_get_string (gconf_section, KEY_LAST_PATH, NULL);
+  if (!dir)
+    dir = g_strdup (g_get_home_dir ());
+
+  return dir;
 }
 
 void
-gnc_extract_directory (char **dirname, const char *filename)
+gnc_set_default_directory (const gchar *gconf_section, const gchar *directory)
 {
-  char *tmp;
-
-  if (*dirname)
-    free(*dirname);
-
-  /* Parse out the directory. */
-  if ((filename == NULL) || (strrchr(filename, '/') == NULL)) {
-    *dirname = NULL;
-    return;
-  }
-
-  *dirname = g_strdup(filename);
-  tmp = strrchr(*dirname, '/');
-  *(tmp+1) = '\0';
+  gnc_gconf_set_string(gconf_section, KEY_LAST_PATH, directory, NULL);
 }
 
 QofBook *
diff --git a/src/app-utils/gnc-ui-util.h b/src/app-utils/gnc-ui-util.h
index 33c801d0d3..0ccc662364 100644
--- a/src/app-utils/gnc-ui-util.h
+++ b/src/app-utils/gnc-ui-util.h
@@ -49,31 +49,9 @@ gboolean gnc_reverse_balance_type(GNCAccountType type);
 
 /* Default directories **********************************************/
 
-void gnc_init_default_directory (char **dirname);
-/** 
- * Extracts the directory part of the given 'filename' into the char
- * pointer variable '*dirname'. If the 'filename' is NULL or does not
- * contain any directory separator '/', then '*dirname' will be set to
- * NULL.
- * 
- * WATCH OUT: If '*dirname' (i.e. the underlying char pointer
- * variable) is non-NULL, then it will be free()'d. Make sure that you
- * have initialized it to NULL, or otherwise you will get a bogus
- * free() or a double-free() here. FIXME: This is probably not-so-good
- * behaviour and should be changed (2005-10-08, cstim).
- *
- * Again watch out: The caller takes ownership of the char buffer
- * '*dirname', i.e. the caller has to do a g_free(*dirname) when that
- * buffer is no longer in use.
- *
- * NOTE: We strongly recommend to use g_path_get_dirname() from glib
- * instead of this function. (There's one slight functional difference:
- * If filename is NULL or does not contain a separator,
- * g_path_get_dirname will return "." whereas this function here will
- * return NULL. 2006-03-02, cstim)
-*/
-void gnc_extract_directory (char **dirname, const char *filename);
-
+gchar *gnc_get_default_directory (const gchar *gconf_section);
+void gnc_set_default_directory (const gchar *gconf_section,
+				const gchar *directory);
 
 /* Engine enhancements & i18n ***************************************/
 QofBook * gnc_get_current_book (void);
diff --git a/src/gnome-utils/gnc-file.c b/src/gnome-utils/gnc-file.c
index edbca8a875..e16a91e6b9 100644
--- a/src/gnome-utils/gnc-file.c
+++ b/src/gnome-utils/gnc-file.c
@@ -40,7 +40,6 @@
 #include "gnc-ui.h"
 #include "gnc-ui-util.h"
 #include "gnc-window.h"
-#include "gnc-gconf-utils.h"
 #include "gnc-plugin-file-history.h"
 #include "qof.h"
 #include "TransLog.h"
@@ -129,14 +128,9 @@ gnc_file_dialog (const char * title,
     gtk_dialog_add_button(GTK_DIALOG(file_box),
 			  okbutton, GTK_RESPONSE_ACCEPT);
 
-  if (starting_dir) {
-    gchar *dir_name;
-
-    /* Ensure we have a directory name.  The set function fails otherwise. */
-    dir_name = g_path_get_dirname(starting_dir);
-    gtk_file_chooser_set_current_folder(GTK_FILE_CHOOSER (file_box), dir_name);
-    g_free(dir_name);
-  }
+  if (starting_dir)
+    gtk_file_chooser_set_current_folder(GTK_FILE_CHOOSER (file_box),
+					starting_dir);
 
   gtk_window_set_modal(GTK_WINDOW(file_box), TRUE);
   /*
@@ -845,8 +839,7 @@ gnc_file_open (void)
 
   lastfile = gnc_history_get_last();
   newfile = gnc_file_dialog (_("Open"), NULL, lastfile, GNC_FILE_DIALOG_OPEN);
-  if (lastfile)
-    g_free(lastfile);
+  g_free(lastfile);
   result = gnc_post_file_open (newfile);
 
   /* This dialogue can show up early in the startup process. If the
@@ -877,21 +870,17 @@ gnc_file_export_file(const char * newfile)
   QofBackendError io_err = ERR_BACKEND_NO_ERR;
   gchar *default_dir;
 
-  default_dir = gnc_gconf_get_string(GCONF_SECTION, KEY_LAST_PATH, NULL);
-  if (default_dir == NULL)
-    gnc_init_default_directory(&default_dir);
-
   if (!newfile) {
+    default_dir = gnc_get_default_directory (GCONF_SECTION);
     newfile =  gnc_file_dialog (_("Export"), NULL, default_dir, GNC_FILE_DIALOG_EXPORT);
     g_free(default_dir);
-    default_dir = NULL;
     if (!newfile)
       return;
   }
 
   /* Remember the directory as the default. */
-  gnc_extract_directory(&default_dir, newfile);
-  gnc_gconf_set_string(GCONF_SECTION, KEY_LAST_PATH, default_dir, NULL);
+  default_dir = g_path_get_dirname(newfile);
+  gnc_set_default_directory (GCONF_SECTION, default_dir);
   g_free(default_dir);
   
   qof_event_suspend();
@@ -1020,15 +1009,14 @@ gnc_file_save_as (void)
 
   last = gnc_history_get_last();
   if (last) {
-    gnc_extract_directory(&default_dir, last);
+    default_dir = g_path_get_dirname(last);
     g_free(last);
   } else {
-    gnc_init_default_directory(&default_dir);
+    default_dir = gnc_get_default_directory(GCONF_SECTION);
   }
   filename = gnc_file_dialog (_("Save"), NULL, default_dir, 
-		  GNC_FILE_DIALOG_SAVE);
-  if (default_dir)
-    free(default_dir);
+			      GNC_FILE_DIALOG_SAVE);
+  g_free(default_dir);
   if (!filename) return;
 
   /* Check to see if the user specified the same file as the current
diff --git a/src/import-export/hbci/gnc-file-aqb-import.c b/src/import-export/hbci/gnc-file-aqb-import.c
index b055eb042b..d91c336887 100644
--- a/src/import-export/hbci/gnc-file-aqb-import.c
+++ b/src/import-export/hbci/gnc-file-aqb-import.c
@@ -45,7 +45,6 @@
 #include "gnc-engine.h"
 #include "gnc-file.h"
 #include "gnc-ui-util.h"
-#include "gnc-gconf-utils.h"
 
 #include "gnc-hbci-utils.h"
 #include "gnc-hbci-gettrans.h"
@@ -153,9 +152,7 @@ void gnc_file_aqbanking_import (const gchar *aqbanking_importername,
   /* qof_log_check(MOD_IMPORT, QOF_LOG_TRACE); */
   DEBUG("gnc_file_dtaus_import(): Begin...\n");
 
-  default_dir = gnc_gconf_get_string(GCONF_SECTION, KEY_LAST_PATH, NULL);
-  if (default_dir == NULL)
-    gnc_init_default_directory(&default_dir);
+  default_dir = gnc_get_default_directory(GCONF_SECTION);
   selected_filename = gnc_file_dialog(_("Select an DTAUS file to process"),
 				      NULL,
 				      default_dir,
@@ -165,7 +162,7 @@ void gnc_file_aqbanking_import (const gchar *aqbanking_importername,
   if(selected_filename!=NULL) {
     /* Remember the directory as the default. */
     default_dir = g_path_get_dirname(selected_filename);
-    gnc_gconf_set_string(GCONF_SECTION, KEY_LAST_PATH, default_dir, NULL);
+    gnc_set_default_directory(GCONF_SECTION, default_dir);
     g_free(default_dir);
 
     /*strncpy(file,selected_filename, 255);*/
diff --git a/src/import-export/log-replay/gnc-log-replay.c b/src/import-export/log-replay/gnc-log-replay.c
index e2578cf05f..9bfc6f4b2b 100644
--- a/src/import-export/log-replay/gnc-log-replay.c
+++ b/src/import-export/log-replay/gnc-log-replay.c
@@ -43,7 +43,6 @@
 #include "qof.h"
 #include "gnc-book.h"
 #include "gnc-ui-util.h"
-#include "gnc-gconf-utils.h"
 #include "gnc-gui-query.h"
 
 #define GCONF_SECTION "dialogs/log_replay"
@@ -515,9 +514,7 @@ void gnc_file_log_replay (void)
   qof_log_set_level(GNC_MOD_IMPORT, QOF_LOG_DEBUG);
   ENTER(" ");
 
-  default_dir = gnc_gconf_get_string(GCONF_SECTION, KEY_LAST_PATH, NULL);
-  if (default_dir == NULL)
-    gnc_init_default_directory(&default_dir);
+  default_dir = gnc_get_default_directory(GCONF_SECTION);
 
   filter = gtk_file_filter_new();
   gtk_file_filter_set_name(filter, "*.log");
@@ -526,12 +523,14 @@ void gnc_file_log_replay (void)
 				      g_list_prepend(NULL, filter),
 				      default_dir,
 				      GNC_FILE_DIALOG_OPEN);
+  g_free(default_dir);
 
   if(selected_filename!=NULL)
     {
       /* Remember the directory as the default. */
-      gnc_extract_directory(&default_dir, selected_filename);
-      gnc_gconf_set_string(GCONF_SECTION, KEY_LAST_PATH, default_dir, NULL);
+      default_dir = g_path_get_dirname(selected_filename);
+      gnc_set_default_directory(GCONF_SECTION, default_dir);
+      g_free(default_dir);
 
       /*strncpy(file,selected_filename, 255);*/
       DEBUG("Filename found: %s",selected_filename);
@@ -582,7 +581,6 @@ void gnc_file_log_replay (void)
       }
       g_free(selected_filename);
     }
-  g_free(default_dir);
 }
 
 
diff --git a/src/import-export/ofx/gnc-ofx-import.c b/src/import-export/ofx/gnc-ofx-import.c
index 9f4ffd0fdd..f150ad8cdc 100644
--- a/src/import-export/ofx/gnc-ofx-import.c
+++ b/src/import-export/ofx/gnc-ofx-import.c
@@ -46,7 +46,6 @@
 #include "gnc-engine.h"
 #include "gnc-book.h"
 #include "gnc-ui-util.h"
-#include "gnc-gconf-utils.h"
 #include "gnc-glib-utils.h"
 
 #define GCONF_SECTION "dialogs/import/ofx"
@@ -648,23 +647,19 @@ void gnc_file_ofx_import (void)
   qof_log_check(GNC_MOD_IMPORT, QOF_LOG_TRACE);
   DEBUG("gnc_file_ofx_import(): Begin...\n");
 
-  default_dir = gnc_gconf_get_string(GCONF_SECTION, KEY_LAST_PATH, NULL);
-  if (default_dir == NULL)
-    gnc_init_default_directory(&default_dir);
+  default_dir = gnc_get_default_directory(GCONF_SECTION);
   selected_filename = gnc_file_dialog(_("Select an OFX/QFX file to process"),
 				      NULL,
 				      default_dir,
 				      GNC_FILE_DIALOG_IMPORT);
   g_free(default_dir);
-  default_dir = NULL;
 
   if(selected_filename!=NULL)
     {
       /* Remember the directory as the default. */
-      gnc_extract_directory(&default_dir, selected_filename);
-      gnc_gconf_set_string(GCONF_SECTION, KEY_LAST_PATH, default_dir, NULL);
+      default_dir = g_path_get_dirname(selected_filename);
+      gnc_set_default_directory(GCONF_SECTION, default_dir);
       g_free(default_dir);
-      default_dir = NULL;
 
       /*strncpy(file,selected_filename, 255);*/
       DEBUG("Filename found: %s",selected_filename);
diff --git a/src/import-export/qif-import/druid-qif-import.c b/src/import-export/qif-import/druid-qif-import.c
index 015635c0eb..f28b11224a 100644
--- a/src/import-export/qif-import/druid-qif-import.c
+++ b/src/import-export/qif-import/druid-qif-import.c
@@ -378,9 +378,7 @@ gnc_ui_qif_import_select_file_cb(GtkButton * button,
   char *file_name, *default_dir;
 
   /* Default to whatever's already present */
-  default_dir = gnc_gconf_get_string(GCONF_SECTION, KEY_LAST_PATH, NULL);
-  if (default_dir == NULL)
-    gnc_init_default_directory(&default_dir);
+  default_dir = gnc_get_default_directory(GCONF_SECTION);
 
   filter = gtk_file_filter_new ();
   gtk_file_filter_set_name (filter, "*.qif");
@@ -393,20 +391,20 @@ gnc_ui_qif_import_select_file_cb(GtkButton * button,
   /* Insure valid data, and something that can be freed. */
   if (new_file_name == NULL) {
     file_name = g_strdup(default_dir);
-  } else if (*new_file_name != '/') {
-    file_name = g_strdup_printf("%s%s", default_dir, new_file_name);
+  } else if (!g_path_is_absolute(new_file_name)) {
+    file_name = g_build_filename(default_dir, new_file_name);
     g_free(new_file_name);
   } else {
     file_name = new_file_name;
+    /* Update the working directory */
+    g_free(default_dir);
+    default_dir = g_path_get_dirname(file_name);
+    gnc_set_default_directory(GCONF_SECTION, default_dir);
   }
+  g_free(default_dir);
 
   /* set the filename entry for what was selected */
   gtk_entry_set_text(GTK_ENTRY(wind->filename_entry), file_name);
-
-  /* Update the working directory */
-  gnc_extract_directory(&default_dir, file_name);
-  gnc_gconf_set_string(GCONF_SECTION, KEY_LAST_PATH, default_dir, NULL);
-  g_free(default_dir);
   g_free(file_name);
 }