[Dovecot] Nested folders - Thunderbird -> Dovecot (mbox) -> Ubuntu 9.04

I'm running dovecot on an ubuntu 9.04 install, connecting via thunderbird everything is working fine except for having nested folders.

I have the following set up for mail directories:- mail_location = mbox:/var/mail/%1n/%n:INBOX=/var/mail/%u

Any suggestions / pointer welcomed.

Thanks

John