I am using SSH-2 and SFTP-3 and do not see "Newer and update

I think I am using the proper protocols. I looked in Server/Protocol Information dialog. I do not see "Newer and updated file(s) only" options anywhere. I don't see a "More button" either. Please help. I love this tool. First time trying it for syncing.

The option cannot be used for synchronization. It is used with file transfer only (well as kind of syncing). You will find it here anyway.
What version of WinSCP are you using?

Thank you for your reply. I am using 4.1.3 Build 493.

I cannot find that dialog anywhere in Options | Preferences! What is wrong?

I finally found it by pressing F5. I have *never* did a file copy using F5 -- only drag and drop! That's why I never saw this dialog before. It might be a good idea to include this dialog in Options | Preferences too. ;)