I think some of the problems with conflicts between this module and other modules is that at around line 181, you have
[code="php"]
} else if (count($PHORUM["DATA"]["BREADCRUMBS"]) < 2 || isset($PHORUM["DATA"]["BREADCRUMBS"]["favorites"])) {
$forum_source = $PHORUM["DATA"]["FORUMS"];
[/code]
And use $forum_source to rebuild the list you return to the hook exit. So if another mod is running before favorites, any changes that mod makes are lost when favorites runs.
One way to fix this would be to give favorites a priority so it runs 'first' at the index hook. Which sort of makes sense because favorites adds entries to the list of forums....