I have KDE3.5 and KDE4 installed in parallel. When logged into KDE3.5, the KDEDIRS environment variable is set to /usr:/usr/local:/usr/kde/4.2. This causes various problems such as no entries in kcontrol and kinfocenter.
Looking in /usr/kde/3.5/bin/startkde I notice the setting of KDEDIRS is commented out.
In /usr/kde/4.2/bin/startkde KDEDIRS is set.
If I uncomment the setting of KDEDIRS in /usr/kde/3.5/bin/startkde, everything seems to work correctly.
kcontrol window has no entries
Oxygen icon theme from 4.X gets defaulted in KDE3.5, but many icons don't work.
Probably other problems as well...
This is a feature introduced to fix bug 237718.
After reading bug 237718 it looks like my problem is caused by the startkde script in KDE4.2 setting KDEDIRS, when startkde in KDE3.5 does not. As ong as netiehr set KDEDIRS everything should work fine.
Since KDE4.2 is from an overlay and thus unsupported I'm OK with closing this bug.