In the previous version of Kmail, it would show unread email in subfolders like:

Inbox (0 + 1)

or expanded:

Inbox
|- Voicemail (1)

Now, it just shows

Inbox 1

And so I just spend a while trying to find the unread email in my inbox, forgetting that the folder was there (because it was collapsed).

Is there a way to get the old display back? The current display was one of my pet peeves about using Outlook at work, and now it's the same at home!

Just right-click on the grey Folder bar and you will see the options to include, one being Unread.

In KMail 2.1, I right click on the folder bar, and gives me the options to view unread mail, total mail, and mail size. But the unread mail display does not distinguish between unread mail in this folder, and unread mail in a subfolder. That's the problem in the first place.