"Failed to execute default File Manager: Input/output error"

I am getting the below error when I try to go Places > Home Folder for example. I can run nautilus manually though.

I had a similar problem, although I believe mine was caused by associating an application with a filetype in Firefox. Running the mimeopen -d ~/Desktop/ command didn't work, but this command did:

exo-preferred-applications -c

In the window that appears, change your default file manager back to your usual choice.

This is a problem caused by setting the "open with" command for folders to "terminal"

Fix from command line:

mimeopen -d ~/Desktop/

You will get this:

Please choose a default application for files of type inode/directory

    1) Open Folder  (nautilus-folder-handler)
    2) Other...

use application #

Choose Nautilus and you fixed the problem!