That is correct and I thought very bad design as well. I brought this up during my beta testing with RIM and I was phase 1. They didn't seem to think it was a big deal. I don't remember what it was but they did give me a reg hack that will stop it from synching the folders under contacts and only synch the contacts folder. That may help a bit but you would have to call RIM for the reg hack or if someone on hear nows it and can post it.
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