Anyone else having this problem or have suggestions?
The executable is /usr/libexec/gnome-settings-daemon, and while I don't have any specific ideas, I can tell you that it won't work if there isn't a dbus session already running (which is usually started via dbus-launch), and the dbus session probably won't work if there isn't a system dbus daemon running.
A lot of the settings are stored in the ~/.gconf* directories, so if something in them was corrupted it might make it flake out.