Cloud Chaser,
That is how the TCAS works when the other transponder has a mode C; all mode A only targets are displayed because it doesn't know their level in order to apply the filter. It will then assume the target is at the same level as you and issue a TA if appropriate, but it will not issue any RA's since it is unable to compute a solution.
Edit - many apologies, I've just read your post properly and what you said is absolutely correct - I'll just crawl back into my hole
!!!!su Tonka,
I'm afraid I don't know the situation in your part of the globe, but here in the UK the majority of light piston GA machines haven't got mode C. Primarily because the electronics cost as much as the rest of the aircraft. That may be the reason why they don't switch it on! I hope my clarification for CC above is also useful to you.
All the best,
BJJ