Outlook/Hotmail on Android - where's the folders?

So my Lumia got a little busted up this past weekend and instead of dropping cash on another one I'm gonna wait 'til WP8 lands. In the interim I've subbed in an Android handset.

This has been slightly more aggravating than I expected, since I'd kinda forgotten how far I'd moved out of the Google ecosystem. Most of the services work pretty well, but the Hotmail app is...well...not great. Serviceable but not great.

Which brings me to the point of this post (sorry for the run-up there): is it just me, or does the Hotmail app not register any of the custom folders that I've created? If this is the case generally, combined with the fact that the app doesn't seem to support categories (a feature which Hotmail has had for nearly a year), the I gotta say I'm pretty diappointed by MS's effort here. I don't need a pretty app, but given Android's marketshare, one would think that they'd want users of all stripes to enjoy a full-featured experience. Or maybe I've somehow failed to find these features - if this is the case, please ridicule me mercilessly.

Also, as a complete aside, does anyone have any better recommendations? I tried K-9 a long time ago and wasn't terribly impressed, but some positive feedback might convince me to try again.