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I20060125-0800 - Check out a project from CVS - Add a folder anywhere in the project - Right click -> Replace With -> Latest from HEAD - Click Overwrite when the dialog appears. The project is still showing up as having differences from HEAD (the added folder). I would have expected it to be equivalent to deleting the project and checking it out again from HEAD, and as a result no more ">" marker on my project to show that it is dirty compared to the repository. Works for files, just not folders.
We do not plan to address this in 3.3.
I have checked it with I20070621-1340 and it works as expected.
Marking as worksforme in response to comment 2.