Yoav,
Sorry for late response, I guess I just missed your question but unfortunately I wont be able to help there since this is an error that I am getting from the server so all I am doing is just prorogating it back to the client.
bdelaney,
As far as SynchronizeDirectories, this piece was contributed by other developer so I cant say much there but if you can provide me with test case code showing how it suppose to work I will try to look at it as soon as I can.
Thanks,
Oleg