I have a problem using KAddressBook which is stopping me adopting Kmail as my main mail client.

Background.
I have a structured address book with separate address book folders for contacts in different areas, e.g. Family, College etc.
Within each folder I need to create Groups so that I can easily e-mail lists of people.

Problem.
When I create group I can only add contacts that are in my 'Personal Contacts' folder if I use the prompted name entry. So I tried drag and drop which created the groups but also created a duplicate contact entry in my 'Personal Contacts' folder, destroying the address book structure and creating unwanted and unnecessary duplicates

What am I doing wrong? Is it really necessary to have a contact in your 'Personal Contacts' folder if you want to add them to a group?

Help please!