I noticed that particular module broke several months ago myself. It used to work, but eventually Google made some changes that seemed to render it incapable of any actual message handling. However, given the new gmail version is officially live, I'd say the last nail is in the coffin for that module.

If it's really important to you, though, I'm pretty sure Fuse has an IMAPFS plugin. Be warned that the new IMAP interface for gmail is dreadfully slow, but I suspect that has to do with quantity of messages over size.