Dropbox recently introduced Project Infinite, which displays a 0 byte file placeholder in Finder / Explorer that when double-clicked causes the Dropbox app to download the file and open it.
It doesn't appear to have been enabled on my account yet so I can't test it but their demo video shows it being completely seamless.
Does anyone know exactly how this is occurring behind the scenes? Are they using something like FUSE to create their own file system?
Also, how do they make it appear to be 6 MB when the file is actually 0 bytes?
So it seems like Dropbox has answered my question for me in a follow-up blog post.
They were going to use FUSE but decided against it for performance reasons. They're directly building native kernel extensions, which is probably overkill for my needs. I guess I'll stick with FUSE.