Fugu has been updated to v1.2.0. This update adds drag and drop from remote pane to Finder and fixes a bug with valid paths for alternative OpenSSH installations. The release notes are available here. Read the Favored Freeware entry for Fugu here.
Fugu v 1.20 still suffers from the problem of leaving selections in place after items are deleted. New items move up and become selected, and I have occasionally accidently deleted them. Selections (items highlighted) should disappear after a deletion.
Yes, you do have to be careful while deleting items under Fugu. I am not affiliated with Fugu and it’s development team, so you will have to contact Fugu’s developers directly if you want to submit a bug report.