The problem is Finder. It often requires access to ._ (apple double)
files to work properly. The option you're checking makes it so all
those reads and writes do nothing, thereby severely confusing Finder.
If you uncheck that option, things (usually) work as normal (unless
the FTP server doesn't allow such filenames), except things are
_really_ slow. This issue is not on Macfusion's side, but on the side
of the FUSE filesystem (curlftpfs, sshfs). I think it _can_ be solved
at the MacFUSE level using a transparent "stacking" FUSE filesystem
that will cache appledobule files _locally_, making things work and
also be very fast. This is a difficult project, however, and at this
point well outside of the level of time I have to contribute, not to
mention that it's at a lower level than most of the programming I have
done. It would be a very significant contribution to the Mac and FUSE
communities if such a thing were built, as then all network FUSE
filesystems like S3, FTP and SSH would see functionality and
performance gains.
Michael