For all of you Windows 7 users who have been annoyed (like myself) at the removal of "Auto Arrange", a fix has been discovered.
It was discovered by Ramesh Srinivasan @ How to Disable Full Row Select in Explorer in Windows 7? - The Winhelponline Blog
(Taken from the site)
Iím writing this article specifically for Windows 7, because the FullRowSelect registry key that you used in Windows Vista, doesnít work in Windows 7.....
Auto arrange menu option is back. Atlast, you can disable Auto arrange option when in "icons" view. This wasnít possible in Windows 7 earlier.....
It involves editing the Registry so I don't reccomend it for everyone, however, I have had limited Registry Editing experience and I was able to follow the step by step instructions with complete success. I can confirm that the fix/hack does enable you to use "Auto Arrange" but I can not guarentee that your system will remain stable after the edit, as editing the Registry can cause problems if done incorrectly. If you edit the Registry you do so at your own risk.