Sorry to respond so late to this, perhaps my experience will help.

I believe that Mike's problem is caused by weird behavior in
Mail.App. I had the same issue after switching from Courier IMAP to
Dovecot 1.0beta2. (Courier requires the INBOX prefix).

I only experienced this problem for folders that I defined myself. In
other words, the "standard" Sent, Trash and so on were OK. What I
found was that if I had a custom folder, call it Dovecot, and a rule
that directed mail list messages into that folder, Mail.App would
insist on creating INBOX.Dovecot, even though .Dovecot already existed.

It's as if Mail.App had internalized the INBOX prefix in some secret
place and would not let go of it even though I changed the prefix
setting to be empty.

My solution was to delete my mail account, shut down Mail.App, re- launch it, and recreate the mail account. Now, everything works as
expected.

-Steve

On Feb 14, 2006, at 7:38 AM, Mike Garfias wrote:

Timo -

Thanks for the reply.

I know it _LOOKS_ like I set the prefix, but I did not.

In the prefs, my IMAP Path Prefix is blank.

I discovered, that Mail.app puts the non-prefixed folders directly
into the sidebar, which is kind of whacky, but I can live with. Prefixed
folders go under the inbox.

I don't get it, but it seems to be working ok, so I'll live with it.

I also duplicated this on another mac so its not just my box being
wonky.

Thanks

Timo Sirainen spoke forth with the blessed manuscript:

...

On Fri, 2006-02-10 at 09:38 -0700, Mike Garfias wrote:

...

I'm having a problem with Mail.app and imap folders. I've got a
new install of dovecot 1.0beta2, and am only experiencing this problem with
Mail. Mutt works as expected, as well as thunderbird.

When I create a folder using Mail.app, it is written to ~/Maildir/.INBOX.newfolder, which would be fine, if I wasn't telling everything that I wanted no prefixes. If I move that folder to ~/Maildir/.newfolder, Mail.app can no longer see it, but mutt and
thunderbird can. Thunderbird _CAN_ see the folders created as .INBOX.Folder,
and even shows it as a subfolder of my inbox, but Mutt completely refuses
to see it.

Any ideas what I'm doing wrong here?

Looks like you've set IMAP prefix to "INBOX." in Mail.app's configuration. Remove that.