The standard IMAP folders and IMP's folders are stored in different locations by default. You can make a simple change to IMP's config to fix this. I don't remember exactly what it is, but I'm sure you can find it here.
OE 5 and 6 work fine with a vanilla e-smith 4 install, and after upgrading to 5.0. I left the root folder blank and had no problems at all.