You've been using Mutt as in IMAP client? Every time I try to use it as such, it is horrible. Am I missing something, or has something been updated in the last few months?

No, I don't use IMAP. The Mutt and IMAP page gives the impression of fairly robust IMAP support, although it does say you should use the development (1.3.x) version if you need IMAP. FWIW, I've been running 1.3.17 with no problems.

Borislav