Can you explain a little more in what ways you find it inadequate? It's hard to fix or enhance a feature without a little more feedback.
The sparrow UI only shows one label in it's main list view, and then only the colour of said label. If you use labels to assist in scanning your inbox, then multiple labels on messages in your inbox increases their usefulness considerably.
In it's current state Sparrow obfuscates what i consider to be gmail's most valuable feature.