This is the same error as intentionally typing in a bad email/password.

This happens every time I try to login to my linode squirrelmail.
I can send email to test@my.domain.com

I can verify that the email gets there at
/var/vmail/my.domain.com/test/new

both internally using mailx and externally from multiple servers
I'm using postfix, courier, mysql to receive email on the server
I've restarted all of these, and reread all directions and checked all files.
I've also checked internet docs for all of these, looking for possible omissions in the linode docs, and for answers here.

When I try local evolution on my home linux boxes, I get:
Error while Scanning folders in "IMAP server mail.mydomain.com".

Any thoughts?

Got it fixed. Up and running! Two typos and one undocumented feature.

The undocumented feature revolved around secure passwords. I was using MySQL encrypt without a specified salt, and my database did not store that. So what happened was every time I tried to login, MySQL was generating a different password hash. Once I identified the issue, fixing it was easy.

This line was the problem:
INSERT INTO users (email, password) VALUES ('sales@example.com', ENCRYPT('password'));

Add a salt field into the users database.
Add a salt into the ENCRYPT clause, and store it along with the password.

The MySQL becomes:
INSERT INTO users (email, password, salt) VALUES ('sales@example.com', ENCRYPT('password', 'salt'), salt);

I've done this before with Ruby on Rails, so the concept was familiar.