Gmail is a very well designed email tool, but many people find it frustrating at first. Why? I think the main problem is that most people are only using Gmail some of the time. This means that when they look at email threads, mails they have read in other applications are not collapsed and they have to scroll a long way to find the newest message. I experienced this and noticed the problem with a few of my friends who have not yet fully migrated. Try moving to Gmail full time and this problem will go away automatically.
Moving to Gmail has been one of the best move's I've made. Here are a few tips on how to make good use of email and how to ease the transition.
1) Search
Using the search operators like to: , from: , label: etc can really make it easy to find the email you are looking for. Use a + or - to combine or exclude. One thing I particularly like is that, for example, searching for 'John' will search the name field and email address field, so even if John has an email address like [email protected], or even if he has multiple email addresses. You'll still find all the email address from him as long as the address book entry is properly completed with his name, which is usually done automatically if his name is included on the emails he has sent you.
Update: I forgot one very important thing in my original post. When you click on the threads in the search results, only the mails that match your search query will be expanded. All the others will be collapsed. This is a very useful and well designed feature, but I guess that many users don't know that this is a feature and wonder why many of the messages are collapsed.
2) Viewing past emails from one person
Most people are used to seeing a chronological list of emails on a given topic or from a certain person. This can be useful. For example, if you have an approximate idea when the email was received but can't remember the thread it was in or think of any appropriate search terms to help narrow down the results. Google's threaded view does not enable to viewing mails purely chronologically.
3) Viewing Unread Mails in Inbox
4) Folders vs. Labels
I think this is a relative easy habit to break. Many people are used to filing mails in folders. This is a result of the historic lack of good search tools in other email applications. In reality, filing mails in folders is an unproductive waste of time. Once you get used to search you'll find it easy to find the mails you want and will be able to eliminate email filing and spend more time on productive things.
5) Shortcuts
GMail has a bunch of shortcuts listed here. By far my favorite short cut is [ . This moves the mail you are reading into the archives an displays the next email.
6) No deleting
With GMail's huge storage allowance and more available for purchase at super low prices you simply don't need to delete. Just archive and know that the email is only a search away. If anything, you can import all you past email archives into GMail so you have everything in one place.
7) Mobile and Offline Access
Google has good support for mobile access. You can get your email on almost any device in a format designed for the small screen. The iPhone interface is nice too, although having the search only at the bottom of the Inbox screen is annoying. If you ever do want to get your Gmail offline you can use IMAP to synchronize email with your normal email software. This is a good backup when you first move to Gmail, just in case you can't cope with a sudden switch.
8) Good Help system
It always surprises me that people fail to make good use of the Help files. The answer to the problem that's been niggling you is most probably just a quick click and search away. I haven't linked to many of the pages that provide more info on the features mentioned above, but you can be sure to find more good step-by-step info in the Help files.
9) Hardware Independent
If you are already using another webmail system this is not important, but if you are using desktop software you'll find this a huge benefit. No more worrying about PC failures, migrating mail to another machine, backing up huge archives. I've known people who've lost weeks of productivity because their one of only machine was out of action. (You know who you are :-) For Outlook users - as much as I liked the tool, it's slow and a memory hog, even on powerful machines. The power features and options are difficult to find and use. Moving into the streamlined email in a browser will be a revelation!
10) I'm not sure this justifies an extra point, but note that if you don't like the News section that appears above your email, it just takes seconds to turn this off in the settings. Would be nice if Google provided a one click option to minimize or remove this.
GMail is not perfect, but I think it's close. There are tons of other useful features you'll find if you take a little time to explore. If you turn on the Labs feature you'll get notified of any new experimental features. Since migrating full time to Gmail my email life has been far more productive and I can live with or find workarounds for the downsides. I encourage you to to make the jump.