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I'm pretty sure that in advanced IMAP settings you can set it to delete or archive from the actual GMAIL website. Sooooo... You're both right! 🙂

Also is there any way yet to star/flag emails? So annoying. How about to COPY instead of Move? Then I could just copy them to the stared folder because moving would be Star+Archive, which I don't want.
 
Under my mail settings, I have the option to turn off the archive feature.
 

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