Version: (using KDE 4.2.3)
Installed from: Ubuntu Packages
When the sent folder is set to be the inbox, the reply button is disabled in the toolbar.
... and worse, keyboard shortcuts and menu items for replying are greyed out as well. So there is no (easy) way to reply to a message in the inbox.
Suggested workaround: Select a local folder as Sent-mail folder for your identities (which is the default anyway), and select "Keep replies in this folder" in the inbox folder's properties.
This will not allow you to store your replies to messages in your inbox in different folders depending on the identity used, but that's good enough for me.
This bug will be fixed with KDE 4.2.4.
*** This bug has been marked as a duplicate of bug 189464 ***