Ok so I just had to put this page up to help others who have been fighting this one. Thanks to this post for the actual tip.

In order to use Mail.app effectively with most servers based on Courier-IMAP, you need to set the "IMAP Path Prefix" to "INBOX" in the account preferences.

Do this, and Mail.app will work properly, with Sent items and Drafts. If you don't do this, you'll be fighting the "This message could not be saved" box forever on Tiger.

That is all.