Hi spamoni,
I read your problemo and couldn't stop myself from answering it
If you haven't already solved this problem, please read on because i had the same problem.
Since the SquirrelMail Outlook Theme was developed by a Portugese dude, the folder names are incorrect in config/config.php
The developer decided to add an "s" to the end of some of the folder names. In config.php, scroll down to where it lists the following (around line 350 by default). It should read like one of the following:
a) if you have all your folders as subfolders of INBOX:
$default_move_to_trash = true;
$default_move_to_sent = true;
$default_save_as_draft = true;
$trash_folder = 'INBOX.Trash';
$sent_folder = 'INBOX.Sent';
$draft_folder = 'INBOX.Drafts';
$auto_expunge = true;
$delete_folder = false;
or b) if you don't have your folders as subfolders of Inbox:
$default_move_to_trash = true;
$default_move_to_sent = true;
$default_save_as_draft = true;
$trash_folder = 'Trash';
$sent_folder = 'Sent';
$draft_folder = 'Drafts';
$auto_expunge = true;
$delete_folder = false;
I hope this helps if your problem isn't fixed yet.

BTW, sorry for the delayed response since i don't usually check this forum.