Okay. I\'m sick of this problem. This has to have an easy fix, I\'m sure of it!! I hope SO can help me to get rid of this once and for all!
Configure your project (Project/Properties/Java Build Path/Source) to have, instead of the top level src folder with exclusions, just a list of the folders you do want to compile.
Assuming Eclipse Helios, step by step:
If that works, you should be able to turn autobuild back on. If it doesn't, something strange is going on. Perhaps the project is not using the standard Java Builder, but something like an Ant Builder (Project/Properties/Builders).