Found this in another thread on MR
The VIP Folder will only display emails from the Inbox. If you have mail in other folders, they do not get indexed. This greatly limits the VIP functionality for me, as I have some Rules that move email from certain people to specified folders. All the VIP alerts still work, you just can't use the VIP folder so see any emails outside the Inbox.
Makes it pretty much useless to me as I keep folders for each corporate client I support.