Thanks for that info. The problems I'm experiencing with FTP in VWD are well known, and the only suggestion I've received over at asp.net was to use an FTP client to upload VWD projects to a server, instead of the built-in FTP. But since I often work directly on remote servers in VWD this is not a good solution for me.
I've never used webdav to manage content...if I enabled it on the server, would I still be able to use VWD, the same way I'd use it with FPSE? In other words, open a website via HTTP? If so I will certainly give it a try!