1. Can't I configure courier-imap to allow email
clients to allow creation of new folders at the root
level (by root, i mean at the same level as INBOX)? If
yes, then how?
No. See http://www.inter7.com/courierimap/FAQ.html#namespace
2. How do I create new virtual email ids using java
servlets/perl script dynamically, via internet? i mean
Creating mail accounts is not a part of the IMAP protocol. IMAP defines the
protocol to access existing mail accounts only. You'll have to write your
own custom, site-specific, code.