I have two WordPress 1.5 blogs. For one, the WordPress directory is at the domain level (www.BlogOrDie.com) and in the other case the WordPress directory is a subdirectory (www.something.com/members/) which is password protected.
When I set up a RSS feed to the first blog in ThunderBird 1.0.7, the preview pane shows the HTML page of my blog, set to the article selected plus comments to it. When I point to the second, I just get the text of the blog entry with no web page around it, and no comments. In the second case, the ID and password to the directory are part of the URL. I don't know if this is a WordPress thing or a ThunderBird thing.