As I attempted to anoy those around me with ArrangeByImage today I realized one major flaw.  The original (now updated) code did nothing about the align to grid option on the desktop.  I fiddled a bit and found the style that sets that on the desktop and I am now removing “Align To Grid” when you run the program.  And in the interest of saving others the effort to find out how this is done here is a code snippet in c# / Win32API. Note this will actually work for any listview which is technically what the desktop is.

        [DllImport("user32.dll", CharSet = CharSet.Auto, SetLastError = false)]
        static extern IntPtr SendMessage(HandleRef hWnd, uint Msg, IntPtr wParam, IntPtr lParam);

        [DllImport("user32.dll", SetLastError = true)]
        static extern IntPtr FindWindow(string lpszClass, string lpszWindow);

        [DllImport("user32.dll", SetLastError = true)]
        static extern IntPtr FindWindowEx(IntPtr hwndParent, IntPtr hwndChildAfter, string lpszClass, string lpszWindow);

        const uint LVM_SETEXTENDEDLISTVIEWSTYLE = 4150;
        const uint LVM_GETEXTENDEDLISTVIEWSTYLE = 4151;
        const uint LVS_EX_SNAPTOGRID = 524288;

        private void turnOffSnapToGrid()
        {
            IntPtr programmanagerWindow = FindWindow(null, "Program Manager");
            IntPtr desktopWindow = FindWindowEx(programmanagerWindow, IntPtr.Zero, "SHELLDLL_DefView", null);
            IntPtr listviewWindow = FindWindowEx(desktopWindow, IntPtr.Zero, "SysListView32", null);
            HandleRef desktopReference = new HandleRef(null, listviewWindow);

            int CurrentSettings = (int) SendMessage(desktopReference, LVM_GETEXTENDEDLISTVIEWSTYLE, IntPtr.Zero, IntPtr.Zero);
            IntPtr ptr = new IntPtr(CurrentSettings & ~LVS_EX_SNAPTOGRID);
            SendMessage(desktopReference, LVM_SETEXTENDEDLISTVIEWSTYLE, IntPtr.Zero, ptr);
        }