Index: channels/chan_sip.c
===================================================================
--- channels/chan_sip.c	(.../branches/1.4)	(revision 47644)
+++ channels/chan_sip.c	(.../team/murf/bug7433)	(revision 47644)
@@ -513,6 +513,7 @@
 static struct ast_codec_pref default_prefs;		/*!< Default codec prefs */
 
 /* Global settings only apply to the channel */
+static int global_limitonpeers;		/*!< Match call limit on peers only */
 static int global_rtautoclear;
 static int global_notifyringing;	/*!< Send notifications on ringing */
 static int global_alwaysauthreject;	/*!< Send 401 Unauthorized for all failing requests */
@@ -2941,7 +2942,7 @@
 static int update_call_counter(struct sip_pvt *fup, int event)
 {
 	char name[256];
-	int *inuse, *call_limit, *inringing;
+	int *inuse=NULL, *call_limit=NULL, *inringing=NULL;
 	int outgoing = ast_test_flag(&fup->flags[0], SIP_OUTGOING);
 	struct sip_user *u = NULL;
 	struct sip_peer *p = NULL;
@@ -2950,22 +2951,25 @@
 		ast_log(LOG_DEBUG, "Updating call counter for %s call\n", outgoing ? "outgoing" : "incoming");
 	/* Test if we need to check call limits, in order to avoid 
 	   realtime lookups if we do not need it */
-	if (!ast_test_flag(&fup->flags[0], SIP_CALL_LIMIT))
-		return 0;
 
+	/* Huh? If call_limit is 0, there is no devicestate tracking at all? */
+	/* if (!ast_test_flag(&fup->flags[0], SIP_CALL_LIMIT))
+		return 0; */
+
 	ast_copy_string(name, fup->username, sizeof(name));
 
 	/* Check the list of users only for incoming calls */
-	if (!outgoing && (u = find_user(name, 1)) ) {
+	if (global_limitonpeers == FALSE && !outgoing && (u = find_user(name, 1)))  {
 		inuse = &u->inUse;
 		call_limit = &u->call_limit;
 		inringing = NULL;
-	} else if ( (p = find_peer(fup->peername, NULL, 1) ) ) { /* Try to find peer */
+	} else if ( (p = find_peer(ast_strlen_zero(fup->peername) ? name : fup->peername, NULL, 1) ) ) { /* Try to find peer */
 		inuse = &p->inUse;
 		call_limit = &p->call_limit;
 		inringing = &p->inRinging;
 		ast_copy_string(name, fup->peername, sizeof(name));
-	} else {
+	} 
+	if (!p && !u) {
 		if (option_debug > 1)
 			ast_log(LOG_DEBUG, "%s is not a local device, no call limit\n", name);
 		return 0;
@@ -8029,7 +8033,7 @@
 	/* If they put someone on hold, increment the value... otherwise decrement it */
 	if (hold)
 		peer->onHold++;
-	else if (hold > 0)
+	else
 		peer->onHold--;
 
 	/* Request device state update */
@@ -10125,6 +10129,7 @@
 	ast_cli(fd, "  Our auth realm          %s\n", global_realm);
 	ast_cli(fd, "  Realm. auth:            %s\n", authl ? "Yes": "No");
  	ast_cli(fd, "  Always auth rejects:    %s\n", global_alwaysauthreject ? "Yes" : "No");
+	ast_cli(fd, "  Call limit peers only:  %s\n", global_limitonpeers ? "Yes" : "No");
 	ast_cli(fd, "  User Agent:             %s\n", global_useragent);
 	ast_cli(fd, "  MWI checking interval:  %d secs\n", global_mwitime);
 	ast_cli(fd, "  Reg. context:           %s\n", S_OR(global_regcontext, "(not set)"));
@@ -13061,6 +13066,8 @@
 			parse_ok_contact(p, req);
 		} else {	/* Re-invite on existing call */
 			ast_clear_flag(&p->flags[0], SIP_OUTGOING);	/* This is now an inbound dialog */
+			/* aught not something be done here, to make sure the devicestate
+			 * is proper in the sip_user struct? */
 			/* Handle SDP here if we already have an owner */
 			if (find_sdp(req)) {
 				if (process_sdp(p, req)) {
@@ -14928,7 +14935,7 @@
 
 	if (option_debug > 2) 
 		ast_log(LOG_DEBUG, "Checking device state for peer %s\n", host);
-
+	
 	if ((p = find_peer(host, NULL, 1))) {
 		if (p->addr.sin_addr.s_addr || p->defaddr.sin_addr.s_addr) {
 			/* we have an address for the peer */
@@ -14938,19 +14945,18 @@
 			} else {
 				/* qualify is not on, or the peer is responding properly */
 				/* check call limit */
-				if (p->call_limit && (p->inUse == p->call_limit))
+				if (p->call_limit && (p->inUse == p->call_limit)) {
 					res = AST_DEVICE_BUSY;
-				else if (p->call_limit && p->inUse)
+				} else if (p->onHold) {
+					res = AST_DEVICE_ONHOLD;
+				} else if (p->inRinging && p->inRinging == p->inUse) {
+					res = AST_DEVICE_RINGING;
+				} else if (p->inRinging) {
+					res = AST_DEVICE_RINGINUSE;
+				} else if (p->inUse) {
 					res = AST_DEVICE_INUSE;
-				else
+				} else {
 					res = AST_DEVICE_NOT_INUSE;
-				if (p->onHold)
-					res = AST_DEVICE_ONHOLD;
-				else if (p->inRinging) {
-					if (p->inRinging == p->inUse)
-						res = AST_DEVICE_RINGING;
-					else
-						res = AST_DEVICE_RINGINUSE;
 				}
 			}
 		} else {
@@ -14960,8 +14966,9 @@
 		ASTOBJ_UNREF(p,sip_destroy_peer);
 	} else {
 		hp = ast_gethostbyname(host, &ahp);
-		if (hp)
+		if (hp) {
 			res = AST_DEVICE_UNKNOWN;
+		}
 	}
 
 	return res;
@@ -15852,6 +15859,7 @@
 	global_regcontext[0] = '\0';
 	expiry = DEFAULT_EXPIRY;
 	global_notifyringing = DEFAULT_NOTIFYRINGING;
+	global_limitonpeers = FALSE;		/*!< Match call limit on peers only */
 	global_alwaysauthreject = 0;
 	global_allowsubscribe = FALSE;
 	ast_copy_string(global_useragent, DEFAULT_USERAGENT, sizeof(global_useragent));
@@ -15975,6 +15983,8 @@
 			ast_copy_string(default_notifymime, v->value, sizeof(default_notifymime));
 		} else if (!strcasecmp(v->name, "notifyringing")) {
 			global_notifyringing = ast_true(v->value);
+		} else if (!strcasecmp(v->name, "limitpeersonly")) {
+			global_limitonpeers = ast_true(v->value);
 		} else if (!strcasecmp(v->name, "alwaysauthreject")) {
 			global_alwaysauthreject = ast_true(v->value);
 		} else if (!strcasecmp(v->name, "mohinterpret") 
Index: doc/queues-with-callback-members.txt
===================================================================
--- doc/queues-with-callback-members.txt	(.../branches/1.4)	(revision 47644)
+++ doc/queues-with-callback-members.txt	(.../team/murf/bug7433)	(revision 47644)
@@ -522,3 +522,10 @@
 In the above examples, some of the possible error checking has been omitted,
 to reduce clutter and make the examples clearer.
 
+If SIP devices are being used with queues, you will want to 
+specify limitpeersonly=yes in the [general] section of the sip.conf
+file; it will help keep devicestate visible and correct for your
+sip extensions, with regards to "in use", "ringing", "not in use", etc,
+with respect to queues. Queues use this information to determine
+whether or not the agent is available for calling.
+
Index: main/devicestate.c
===================================================================
--- main/devicestate.c	(.../branches/1.4)	(revision 47644)
+++ main/devicestate.c	(.../team/murf/bug7433)	(revision 47644)
@@ -117,11 +117,22 @@
 
 	if (!chan)
 		return AST_DEVICE_UNKNOWN;
+	
+	switch (chan->_state) {
 
-	if (chan->_state == AST_STATE_RINGING)
+	case AST_STATE_RINGING:
 		res = AST_DEVICE_RINGING;
-	else
+		break;
+	case AST_STATE_BUSY:
+		res = AST_DEVICE_BUSY;
+		break;
+	case AST_STATE_DOWN:
+		res = AST_DEVICE_NOT_INUSE;
+		break;
+	default:
 		res = AST_DEVICE_INUSE;
+		break;
+	}
 	
 	ast_channel_unlock(chan);
 
Index: configs/sip.conf.sample
===================================================================
--- configs/sip.conf.sample	(.../branches/1.4)	(revision 47644)
+++ configs/sip.conf.sample	(.../team/murf/bug7433)	(revision 47644)
@@ -121,6 +121,12 @@
 				; for peers and users as well
 ;callevents=no			; generate manager events when sip ua 
 				; performs events (e.g. hold)
+;limitpeersonly=no		; Apply all call limits ("limit=") only to peers, never
+				; to users. This improves handling of call limits
+				; and device states in certain situations. The user part
+				; of a type=friend will still be affected by the call
+				; limit, but Asterisk will only use one object for
+				; counting the simultaneous calls.
 ;alwaysauthreject = yes		; When an incoming INVITE or REGISTER is to be rejected,
  		    		; for any reason, always reject with '401 Unauthorized'
  				; instead of letting the requester know whether there was