This was driving me nuts too but I managed to find a fix for it, it's similar to bradpfeiffers solution above but resets all keyboard defaults at the same time.
Go to System Preferences > Keyboard
In there I reset everything to default though I am not sure this is absolutely necessary. I also unticked everything to do with Mission Control.
Go to Mission Control Preferences
Untick all four options and change all four of the keyboard shortcuts to '-'
Then go back to Keyboard Preferences and reset defaults again.
Now my Fn key no longer shows the Desktop! I think it must have been a hangover from when I upgraded to 10.8 from 10.6.