I am on 20.04 LTS, and I did a test. Was able to right click on the desktop and create a new folder. Had a text document already on the desktop and was able to drag that text document into the new folder I created without any issue.
Try dragging to and from nautilus. That’s my main missing feature wish.
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Ah yeah, that never worked.
Although Desktop icons NG has better functionalities like drag and drop to desktop, It has a lot of bugs those are wanted to fix. The extension’s experience on 20.04 is not good at all. I hope Ubuntu developers will let their mind to work on it
Sure, there might be bugs (actually I didn’t experienced any particular issue).
But… on 21.10 20.10 the official extension freezes the desktop if you try to drag icons from desktop to Nautilus!!!
That’s a bad issue.
Off course drag & drop from desktop to file manager is not supported, but at least it shouldn’t freeze gnome shell. This can easily happens to newcomers that take for granted this functionality or old users who are used to dragging files (…this happens to me 
).
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what a luck that there is still nearly a year left to fix it until 21.10 gets released then 
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Sorry, of course I meant 20.10
The NG version of the desktop icons has been uploaded now hirsute now
The package should be in the archive tomorrow after being accepted from the binNEW queue, https://launchpad.net/ubuntu/+source/gnome-shell-extension-desktop-icons-ng
Doing some testing it seems to behave correctly, the bugs fixed in the current version are not present in the new version and the dnd to applications and refresh flickers problems are resolved.
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So we need to install extension to get normal traditional desktop behavior?
Is it pre-installed or not?
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No, that will be installed automatically for you once all the components will be in place.
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Great! 
Is there any plan to make NG desktop icons available as .deb in Ubuntu 20.04 as well?
And… maybe replace the original extension for the next point release?
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Not at this point but depending of the feedback we get this cycle we could consider bringing the change back to the LTS
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I would be totally grateful for a drop-in replacement in 20.04 if it worked better. I am one of those types who uses my desktop heavily during projects then cleans it up when done, and moving from Unity has been painful (in this regard at least). I am an LTS-only type, so here is hoping… 
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I think it’s easily installable though, but you may need to manually disable the stock one which isn’t something too easy in the ubuntu session (you need to manually edit the ubuntu.json file in /usr/share/gnome-shell/modes)
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I have just disabled the old ‘Desktop icons’ from Extensions
The old one has been removed!
Calculating upgrade… Done
The following packages were automatically installed and are no longer required:
gnome-shell-extension-desktop-icons vino
Use ‘sudo apt autoremove’ to remove them.
Sincere question- interested in experimenting (while still hopeful for a .deb in the future) it looks like there are versions for 3.34 and 3.38. Would one of these or the other work properly for 3.36 in 20.04?
Testing out Hirsute, it has Desktop Icons NG installed and it is very much usable. In my test I was able to create a folder on the desktop, made a test text file and saved that in the Home directory. Opened up Nautilus, and dragged that text file from Home on to the Desktop. From there I was able to drag the file into the test directory that I had created on the Desktop. I was also able to drag the text file out of that directory back on to the Desktop.
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That’s quite odd. I do sometimes use the Ubuntu Wayland (Focal) session instead of my usual GNOME one and all the Ubuntu extensions (desktop icons, app indicators & dock) are disabled just by toggling them OFF in extensions manager.
I don’t remember to have done any hack to achieve that. And for sure I did not edit an ubuntu.json file.
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It looks unlikely that desktop icons NG will be backported to 20.04 due to issues like this one.
It is unfortunate that 20.04 users will likely forever have the old extension by default, but at least next LTS will probably get the new extension
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Next LTS might be based on GNOME 40, not sure if there is a good desktop icons extension for it.