First off, thanks for adding the ability to not sync certain folders. I'd suggested that about a month ago - really glad to see it.
The problem I'm having is that when I organize files locally by dropping from local root of "My Google Docs" into one of the folders above, the file is moved locally, but then, within a few seconds is recreated in the root of "My Google Docs". It happens every time. I have the latest version (5.4? I don't want to turn it on to check for fear of duping a bunch of files again).
I guess that dupes are better than deletions...
