@booklover001: Gah, you're on Windows. Check the 'Assume the device connected is a Kindle Touch' checkmark in the plugin settings first. That way you'll at least end up with much less confusing output as to what to do to take the changes into account.
But, to answer a bit of everything:
Calibre can't touch the collections database directly on the Touch/PW. You have to go through the Collections Manager Kindle app. If you want to keep *full* sync between calibre and your Touch, you'll have to do an export from Collections manager everytime, before plugging your Kindle in. That's tedious (and what I was referring to in my first post).
That doesn't change the fact that to keep stuff in 'sync' the other way around (Calibre => Kindle), you'll also always have to run an import in Collections Manager after running the plugin & unplugging your Kindle. (And know that Collections Manager will never delete a collection. It will rebuild it from scratch if stuff in it changed, but it won't delete one during an import).
Only handling the Calibre => Kindle side is way more manageable, and you get to keep the stuff you do on your Kindle, as long as it doesn't touch a collection handled by Calibre.
My usual setup is letting Calibre do all the heavy lifting (genres/series/authors), and handle the small stuff (TBR, Reading) on the Kindle. YMMV, though, but complex setups are much more time consuming/annoying to maintain than on older devices.
I'm working on changes to make that workflow even faster (by only feeding Collections Manager the collections that were modified/created, that way it doesn't have to iterate over & recreate everything that didn't change).
Last edited by NiLuJe; 10-07-2012 at 08:20 PM.