Getting “Delete” to work as expected in Gmail IMAP was surprisingly complicated.
The default action when a client deletes a message is to archive it (ie: move it to “All Mail”). I didn’t like this because then if I accessed the account from POP the deleted mail would still be downloaded.
Recommended IMAP settings tells you all the things NOT to do, but doesn’t give any useful advice on how to setup clients.
Eventually after trying many different settings I realised the simplest method was to tell the client to MOVE the message to the Gmail Trash folder when it is deleted. To do this in Thunderbird2 required manually editing the prefs.js file to specify a custom IMAP trash folder:
user_pref("mail.server.server#.trash_folder_name", "[Gmail]/Trash");
Note that the case of the trash folder name IS important.