Fedora includes a modified version of the file config_local.php which breaks the installation for IMAP servers with a folder prefix such as Courier and UW IMAP.
The file /etc/squirrelmail/config_local.php contains an override of the configuration setting $default_folder_prefix, i.e:
$default_folder_prefix = '';
If the IMAP server you're using is configured to use a folder prefix, your SquirrelMail installation needs to be configured accordingly. Since the config.php file created by conf.pl is overridden by config_local.php, any changes to the $default_folder_prefix in config.php won't be used.
This modification of /etc/squirrelmail/config_local.php is made by the package maintainer, so please direct any bug reports regarding this to the Fedora Project and not to the SquirrelMail Project. Update this page with a link to any official Fedora bug report you might find or create.
Edit out any overrides in /etc/squirrelmail/config_local.php that effects the local installation negatively.
The problem exists since at least Fedora 3 and still exists in Fedora 11 (which is the latest version when this is written).