First let me start with a warning: *Do not rename your home folder in Mac OS X 10.3-10.4*

For some stupid reason OS X lets you rename your home folder without issuing any warnings. Unfortunately your system will then create a new home folder named the same as the old one but in a fresh and empty state, so it will look like all your data and personal settings have vanished! This is quite worrying for the novice user.

To fix this problem you'll need to log out and log back in. You'll then be using the new empty user account (and folder). You must rename your new folder to something like myshortname_new and rename your old folder back to myshortname or whatever it was. This will fix all your problems.

Here it is in Apple's words:

1. In the Finder, go to the /Users folder.
2. Locate the new home directory, which bears the users' short name.
3. Add "_new" to the new home directory's name.
4. Rename the old home directory to the user's correct short name.
5. Log out and back in with the affected user account.

Hope that helps someone, I had a very scared sister on the end of iChat freaking out with this problem.