Hmmm. Forwarding is working for me... so it doesn't appear to be a complete breakdown in the operation of "rules". By the way - your signature line says that you are using Max OS X 10.5.2, is this a typo?
To test the rules more thoroughly, can you tell me what the trigger for forwarding is in your rule? i.e. is it based on the sender, the subject, the recipient name?
the rule is based on receipient and it is firing (the appropriate incoming messages are colored yellow and moved to another folder).
i've duplicated the rule so that the only action is forwarding, but that still doesn't work.
i have multiple email accounts in mail. could this have something to do with whatever happens to be the currently selected account, or the default account, or something like that?