Junk Mail Icon Greyed out

What are your Preferences > Junk Mail settings? The Junk mailbox appears only when the junk filter is set to Automatic mode.

BTW, if you’re using Mac OS X 10.3.6, as your profile indicates, it would have been more appropriate to post in the Mail & Address Book - Mac OS X 10.3 & earlier forum. If the discussion applies to both Mail 1.x and Mail 2.x, it doesn’t really matter, but it’s difficult to know that in advance. The wording and/or the location of some of the relevant settings could be different, for example.

You’re welcome.

Manually mark as either junk or not junk all messages that have been treated incorrectly and move them to wherever you want them to be. When done, proceed as follows and let me know whether that fixes the problem:

1. Go to Preferences > Junk Mail and disable junk mail filtering.

2. Quit Mail, then open it again.

3. Go to Preferences > Junk Mail, enable junk mail filtering, and configure it however you wish.

4. Reset the junk filter database ( Preferences > Junk Mail > Reset).

OK. Verify/repair the startup disk (not just permissions), as described here:

The Repair functions of Disk Utility: what's it all about?

After having fixed all filesystem issues, if any, and making sure that there’s enough space available on the startup disk (a few GB, plus the space needed to make a backup copy of the Mail folder), try this:

1. Quit Mail if it’s running.

2. In the Finder, go to ~/Library/Mail/. Make a backup copy of this folder, just in case something goes wrong, e.g. by dragging it to the Desktop while holding the Option (Alt) key down. This is where all your mail is stored.

3. Locate Envelope Index and move it to the Trash. If you see an Envelope Index-journal file there, delete it as well.

4. Open Mail. It will tell you that your mail needs to be “imported”. Click Continue and Mail will proceed to re-create Envelope Index -- Mail says it’s “importing”, but it just re-creates the index if the mailboxes are already in Mail 2.x format.

Note: For those not familiarized with the ~/ notation, it refers to the user’s home folder, i.e. ~/Library is the Library folder within the user’s home folder.

Sorry, I may have misunderstood you. Messages in the Junk mailbox remain there after manually marking them as not junk. This is normal, you must manually move them wherever you wish. Actually, if I’m not mistaken, moving them out of Junk automatically causes Mail to mark them as not junk, so you can skip that step if you wish, but not the other way around.

As to the smart mailbox problem, could you please elaborate on what the problem exactly is?