I tried applying Polypaint before I create the IMM Brush/Object, But when I try to use the IMM Object Brush it does not apply the Polypaint. You mean applying the Polypaint before 'create InsertMesh'?
I have read that part of the manual before, and tried to turn off Polypaint. But I can't seem to get it to work. I apply Polypaint to the model, create an InsertMesh Brush, Turn off Polypait for the object where I insert the IMM Mesh/Brush. And there is no Polypaint on the inserted mesh.