I cannot reproduce this bug with current Oneiric.
For moving upwards I used ALT-ArrowUp and in addition I tried clicking the Back 
icon. Both actions are sucessfull.

ii  nautilus           1:3.1.90-0ubuntu3

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https://bugs.launchpad.net/bugs/381824

Title:
  Cursor becomes 'busy' in Nautilus when changing to parent directory
  while renaming a file

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