I meant that in WinSCP the remote file '\somepath\sample.txt' was openend using "Edit", which downloads sample.txt to C:\Users\..\AppData\Local\Temp\scpXXX\..\sample.txt and opens it in an editor and reuploads the file when it changes.
The "Working Folder" would be linked to the actions that WinSCP does on the remote site:
[R] WinSCP-Actions on the remote ftp-server [W] WinSCP-Actions in the working-Folder
---------------------------------------------------------------------------------------------------------------------------
[R] STOR '\somepath\hello.txt' => [W] '{workingdir}\somepath\hello.txt' is created/overidden
[R] DELE '\somepath\xyz.dat' => [W] '{workingdir}\somepath\xyz.dat' is deleted (if it existed)
[R] MKD '\somepath\newfolder' => [W] '{workingdir}\somepath\newfolder' is created (if it did not exist yet)
[R] QUIT => [W] (Nothing happens)
If {workingdir} is under SVN control, i could see what files i changed/added/deleted since the last commit (and file diffs).
Another usage: You manage a website live.example.org, but changes are first done in an exact copy 'dev.example.org'.
1) You clear {workingdir}
2) You do some changes on dev.example.org (which was linked to {workingdir})
3) When you are done, all touched/modified/new files are in the {workingdir} and could now directly be copied to live.example.org - No need to manually track changes and redo them manually in live.example.org
I hope this explanation does not make it even more incomprehensible :D