gidden2,

I can send mail from RoundCube (have not tried SquirrelMail), but not from Thunderbird and I see the same in my mail.log and auth.log as you describe.
May I ask what you have set the parameter "IMAP_CAPABILITY" to in /etc/courier/imapd? Mine is set to:
Code:
IMAP_CAPABILITY="IMAP4rev1 UIDPLUS CHILDREN NAMESPACE THREAD=ORDEREDSUBJECT THREAD=REFERENCES SORT QUOTA IDLE"
/Mats