Discussion about the general file browser design should go into T62971. A colleague and I are actually working on this so expect news soon.
I'd vote for removing the '..' entry. For some users it might be confusing, and there is a button and a shortcut for it (P). With the button moved closer to the file path, I think that will become more discoverable.

@Jeroen Bakker (jbakker) you should probably double check how I resolved the merge conflicts ;)

Fixed the file browser glitch too now (rB0a28bb14222c).

Committed fix for the crash now.
For the record, I'm sure this used to work, Campbell and I both worked on getting fullscreen file reading with workspace versioning to work fine. So this must have gotten broken by some further changes somewhere. Shows once more how fragile the full-screen code is...

Just for the notes: What's there now is not the final design. @William Reynish (billreynish) already started working on a design to edit this configuration from the new Preferences. I hope to get around to implement this soon.

I've just committed rBa77b63c56943eb with which I'd consider the Preferences redesign as done.
From this task I think the only thing missing is the search, which can be added as general improvement. @William Reynish (billreynish) and I already planned to work on the workspace preferences UI next, but that will probably get its own task.

Aaand messed up commit hash pasting once again. Should refer to b00963afc14978b (rBb00963afc) as part 1.

Pushed a new userpref_redesign branch to the contrib Add-ons repository with needed changes https://git.blender.org/gitweb/gitweb.cgi/blender-addons-contrib.git/shortlog/refs/heads/userpref_redesign.
Other Add-ons don't seem to need updating.

Added a release notes page listing the RNA/Python-API changes of this patch: https://wiki.blender.org/wiki/Reference/Release_Notes/2.80/Python_API/Preferences_API

• Revert changes to RNA path of undo settings
• If anim player is not custom, gray out path option

Although I initially agreed with Brecht that the permanent region is a bit overkill, the idea has grown on me since then, here is why:

Your changes seem reasonable. I'll push them in a minute.

@William Reynish (billreynish) and I continued work in the userpref_redesign branch. Mostly working on the panel/subpanel based layout.
Current screenshots:

The task status is for our internal management of reports. Resolved is only used for valid reports that were fixed by changes in code.
Changing back to Invalid.

There actually are other ways out of it, like the Shift+Fxx shortcuts (e.g. Shift+F5 for 3D View).

@William Reynish (billreynish) suggested to go with the term "Preferences" rather than "Settings":

In rBb00963afc14978b2de7f2859525bf89612aa4aee#206251, @William Reynish (billreynish) wrote:

Hey, this is a nice improvement already. The only thing I would opine against is the name. 'Settings' is much more ambiguous than 'Preferences', especially in an app like Blender which includes many settings in the Properties Editor and lots of other places.

The name 'Preferences' serves as a much more unambiguous differentiation from other settings, than the name 'Settings'. Plus, Preferences is a general standard name for this kind of thing.

I agree with him, he makes a good point. So if nobody objects I'll change the term.

In rBb00963afc14978b2de7f2859525bf89612aa4aee#206251, @William Reynish (billreynish) wrote:

Hey, this is a nice improvement already. The only thing I would opine against is the name. 'Settings' is much more ambiguous than 'Preferences', especially in an app like Blender which includes many settings in the Properties Editor and lots of other places.

The name 'Preferences' serves as a much more unambiguous differentiation from other settings, than the name 'Settings'. Plus, Preferences is a general standard name for this kind of thing.

Made a (rough) implementation of the panel based layout for testing, which looks like this: