Connect to any site, and copy a file to your desktop by drag and drop from the right hand window to your desktop.
Now that works fine.
Copy the same file the same way, and WinSCP will appear to lock up. What happens is that a "Confirm File Replace" dialog pops "up" asking you to confirm replacement of the file, however it is created underneath the WinSCP screen (at least on my system) and there is no way to force the dialog to the front of the screen to confirm it. If you shrink your WinSCP window to 1/2 the screen you'll see the confirm dialog pop up and you can deal with it.
If I forget to resize my WinSCP window before doing this, the only way to exit out is to go to task manager, select the WinSCP session, and choose minimize.
Does this happen on other peoples systems?