I'm not sure that I have a fix for the problem you're seeing but I use the same version of Versamail on my Treo 650.
I have Versamail set to download new unread messages every hour(via IMAP). I've set my Root folder(under Preferences -> Advanced -> Servers) to "INBOX."(minus the quotes). And of course checked Deleted Mail(value INBOX.Trash) and Sent Mail(value INBOX.Sent) on same menu.
In order to actually update my DH mail account with changes I've made to any INBOX messages(reads/deletes), I have to explicitly select "Sync Server Folders" from the Options menu. Sometimes the first attempt errors out. Sometimes it doesn't. Trying a second time usually skips whatever the error was complaining about. Deletions seem to work just fine(deletes on Treo delete mail from DH account) but reads don't seem to get registered(perhaps because of my download settings?).
I'm not too worried about the latter. The important stuff -- sent mail gets copied to IMAP sent folder, new unreads get downloaded, and any deletions I perform get properly updated to the server. I've had my headaches with Versamail so I'm thankful for this functionailty despite the occasional crash/retry overhead.
Hope there's help for you somewhere in the above details.