Hi,
Just wondering if email in the deleted folder is included when we do our backups?

From the looks of a backup I would say, No. Once the information is deleted from the table and backup is performed the data is not available.

Raymond Laubert
http://stores.ebay.com/Collectibles-and-Gifts-From-Ray

As long as it is in the Trash Can it will be backupped. After having purged the Trash Can it will be gone forever.