If you're having problems installing, the instructions at http://compactfolder.mozdev.org may be helpful.
REGARDING THUNDERBIRD 2.x
See https://bugzilla.mozilla.org/show_bug.cgi?id=75927 for details on a patch for the main thunderbird trunk. I'd prefer not to have to keep maintaining this (simple) extension, and it should be no problem to merge it into the main sourcecode for Thunderbird. So, if you are able to, please put some pressure on the TB developers to get it into the trunk.