I ran into this and thought I'd post a note about it.
This company makes a padded armrest that finally solves the crazy cup holder design in the Forester and some other Subaru models.
Can't provide a direct link, but it's worth look at if you still have this problem on 2001 and older Foresters. Just go to the "Quick Links" and choose Subaru.
formatting link
They are about $70 with $6 for shipping. Lots of choices for color.
I've put off buying one since I didn't want to loose my single good cup holder, but now I think this is the answer to getting a padded armrest AND dual cup holders.
enjoy!