MacFUSE is a Mac OS X conversion of the FUSE user-level filesystem framework that originated in Linux. It seems to have mostly died off in the meantime (with hardly any updates since 2008), so currently I’m using ExpanDrive for SFTP.
If you’re looking for a modern replacement that is compatible with Lion, I suggest checking out OSXFUSE or fuse4x which seem to be updated fairly frequently.
Resources:
- MacFUSE Tech Demos from Amit Singh’s Macworld 2007 Talk, wherein the amazing Picasa albums filesystem is demoed.