1. Add the "Show in Favorites" button to your Quick Access Toolbar at the top of your Outlook by expanding the menu next to it, choosing Customize, and finding the "Show in Favorites" item under All commands
2. Switch to Folder View and click to open your Public Folder in your main Outlook window
3. Switch to Mail View but do not click any folders. You should see that your "Show in Favorites" button turns from grey to colored. Click it and it will add the public folder to your Favorites list.
To remedy this, I deleted his copied Public Folder, browsed to the public folder in the [Folder List] view, right clicked on the public folder and selected "Add to Favorites". I changed back to [Mail] view and looked at the "Favorite Folders" but it wasnt there. I switched back to [Folder List] view and navigated to [Public Folders >> Favorites] and there it was. I right clicked on the "Favorite" that I had just created and selected the "Add to Favorite Folders" view, then it was added to the "Favorite Folders" window in the [MAIL] view. [more]
So in short, "Favorites" and "Favorite Folders" DO NOT mean the same thing. To add a public folder to your "Favorite Folders" view in the [Mail] view in Outlook:
Navigate to the [Folder List] view in Outlook.
Navigate to any public folder, right click, then select "Add to Favorites".
Still in the [Folder List] view, go to [-] Public Folders >> Favorites >> XYZFavorite. Right click on the "Favorite" that you just created, select "Add to Favorite Folders".
Your public folder will now appear in the "Favorite Folders" pane in the [Mail] view of Outlook.