Sorry if I was uncler. No, they were not moved. They were originally stored in the video folder, which is one of the selected library folders for DeskScapes when you install it. Mine looks just like yours when I install it. All I know is that when I went to look at my installed dreams, from what I can tell (I only went a few hundred files deep) my entire media library was imported, and was listed in the "Recently Installed" section. This happened after I got a notification that DeskScapes was importing my files from my library folder. I've never seen this happen either in the Beta. My frustration comes from the fact that there's no easy way to remove them without deleting the files, and I lost a few videos because of the unrecoverable deletion that DeskScapes does when you delete it.
I guess I'll just have to live with it, or go with a competing program. I'll be working on it some more tonight, with a fresh install of the program. We'll see what happens.
So... FEATURE REQUEST: 1) A way to either a) clear the recently installed list, b) remove backgrounds without deleting the file, or c) a setting to send deleted files to the recycle bin instead of permanent deletion (this should honestly be the default), 2) a confirmation dialogue where you have to manually confirm the import of files from the pre-selected library directories, or 3) an automatic purge of backgrounds from DeskScapes (without file deletion) when you deselect a folder from being included in the library.