I'm having a similar issue with Windows 7. I work for a school district and our elementary school teachers would like all of our computer desktops to be identical to help the students. But the little brats keep moving things around! I would like to logon GPO to organize the desktop icons. I can probably figure out the GPO side of things, but I've tried running the posted script in CMD and it seems to run, but it doesn't change the order of my icons.
I have noticed that in the registry, my "Sort" value is of type "REG_BINARY" instead of "REG_DWORD" I'm not sure if that affects anything, but even after deleting "Sort" and making a new REG_DWORD value, upon the next logon, it reverts to BINARY.
I am running Windows 7 64-bit, and my target computers are windows 7 32-bit.
Also here are Registry values for the Desktop key
