Version:           3.4 (using KDE KDE 3.5.5)
Installed from:    Gentoo Packages
OS:                Linux

Kompare does not understand directory structures. Reproduce with the following script:
#! /bin/sh
mkdir kompare-directory-bug     && \
cd kompare-directory-bug        && \
mkdir -p tree1/A                && \
mkdir -p tree1/B                && \
mkdir -p tree2/A                && \
mkdir -p tree2/B                && \
echo asdf > tree1/A/file        && \
echo qwer > tree1/B/file        && \
echo asef > tree2/A/file        && \
echo qwdr > tree2/B/file        && \
diff -rU2 tree1 tree2|kompare -
cd ../kompare-directory-bug/..  && \
rm -r kompare-directory-bug


Kompare shows:
Source Folder    Destination Folder
[ ]tree1/A/      [ ]tree2/A/
 └─[ ]tree1/      └─[ ]tree2/
    └─[ ]B/          └─[]B/

Expected:
Source Folder    Destination Folder
[ ]tree1/        [ ]tree2/
 ├─[ ]A/          ├─[ ]A/
 └─[ ]B/          └─[ ]B/