Version:            (using KDE 3.5.8)
Installed from:    Ubuntu Packages
OS:                Linux

When processing the response to the command:

10 LIST "" "%"

KMail requires that the Inbox be listed first. However technically speaking, the folders, including the Inbox can be listed in any order. This causes very weird behavior. Here is a sample response:

* LIST () "." "Cocoa"
* LIST () "." "Drafts"
* LIST (\Noinferiors) "." "Inbox"
* LIST () "." "One"
* LIST () "." "Sent"
* LIST () "." "Special"
* LIST () "." "Spoofed"
* LIST () "." "Trash"
10 OK LIST Complete.

If this is the response, KMail will store the name of the Drafts folder as INBOX. As a result, on a subsequent login the commands will look like:

3 STATUS "Cocoa" (UNSEEN)
4 STATUS "INBOX" (UNSEEN)
5 STATUS "INBOX" (UNSEEN)
6 STATUS "One" (UNSEEN)
7 STATUS "One.Two" (UNSEEN)
8 STATUS "One.Two.Three" (UNSEEN)
9 STATUS "Sent" (UNSEEN)
10 STATUS "Special" (UNSEEN)
11 STATUS "Spoofed" (UNSEEN)
12 STATUS "Trash" (UNSEEN)
13 LIST "" "%"
14 LIST "" "Cocoa.%"
15 LIST "" "Drafts.%"
16 LIST "" "One.%"
17 LIST "" "Sent.%"
18 LIST "" "Special.%"
19 LIST "" "Spoofed.%"
20 LIST "" "Trash.%"
21 LIST "" "One.Two.%"
22 LIST "" "One.Two.Three.%"

Note how the status for the folder INBOX is requested twice (commands 4 & 5). Furthermore, if the user were to select the Drafts folder, the inbox will actually be selected, resulting in all of the messages in the inbox folder appearing in the drafts folder. 

On a side note, KMail does not appear to parse the folder flags insensitive to case. So, for example, KMail will detect \Noinferiors, it will NOT detect \NoInferiors. If memory serves this causes a serious issue with LIST "" "", if the flag returned is \NoSelect.