I finally realized that wife's iBook (10.3.1) mystery with disappearing mail was that the folders she was dragging them to were not subfolders of an "On My Mac" folder. In fact she has NO such folder. On my PBook (10.3.5), the "On My Mac" folder has a folder icon that looks like a little iMac. She has no such.
When we ask for a new folder to be created in her MAIL app (v.1.3), the dialogue box gives only the option for folder to be entered inside "On My Mac". The only thing is... id doesN'T get put in there (there's no 'there' there).
I can upgrade her her to 10.3.5, which would presumably update her MAIL to v.1.3.9(like mine), but I'm not sure this'll fix it. Anyone seen anything like this? Am I missing something simple?