Going Drupal 7

Okay, I investigated the file issue and its sad to say this: There is a LOT of work to be done.

Due to the changes in the file api (which are a big improvement) there are two ways webfm could work:

Simple port

... and thus creating a "shadow" world of unmanaged files. In my opinion this is impossible.

Complex port

Basically a rewrite utilizing the new file api - this comes down to being a file browser a lot more and being a file manager a lot less. But still I would clearly suggest this way, because it allows other modules to intercept and work with the files as well. The whole fileh andling can bascially be done by core - webfm only needs to provide the file browsing.
Metadata, Access Rights and all the good stuff could be provided through hooks from webfm_submodules.

Sorry, I thought it was easier to port this. I attached a patch which implements all the changes mentioned in (http://drupal.org/update/modules/6/7) - if someone decides for the simple way this could be a good starting point.

Thanks for taking a long hard look at this Niels. I agree that the second option makes more sense. The rational for creating the module in the first place was to address the limitations of Drupal's file handling. If D7 fixes those limitations then WebFM should move with the times and either obsolete itself (no D7 port) or provide added value on top of the D7 file api.