Well, that pretty much is what I thought, but wanted to confirm.
I still think its silly they don't have a client side option to skip certain folders. I mean, if you can do it for IMAP, why not for WebDAV connections to exchange.
About the size of my Exchange mailbox... truthfully, I'm looking for an alternative to PST files. We have had many corruptions and the auto-archive feature on Windows only currently supports archiving to PST files. I would love to be able to archive to an IMAP folder. Imagine it, we could create a large "archive" IMAP server where everything is stored in maildir format (as opposed to a big fat database) in directories, and you could easily backup/restore them as well. They would be accessible from anywhere with IMAP (or even a little web front-end like Squirrel), cheap, reliable.
Or, you could use it to simply archive all of your mail to a service like Google Mail. Wouldn't that be nice.
Eric