I agree, multiple windows for the same server are no good. Mimicing the Right Arrow behaviour would work, I guess, but it would be a bit strange that Cmd-Down Arrow would fire different actions, depending on the number of files selected.
Seems like there's no perfect solution for that one. All considered, I'd go with the multiple windows. Should you decide to go that way, it would be very cool if Cmd-Doubleclick would do the same for single selected folders also. And doubleclicking multiple selected folders too, of course.

While I'm on it, I think paulc made a very good point about the Aliases, and it made me ask if it would be possible to add the possibility to create standalone "Droplets" that don't require YummyFTP itself. That would be very handy for the not so computer-savvy customers of mine. I could create a Droplet, send it to them (as long as they're running an OS X version that would be supported by YummyFTP), and they'd just drop their 100MB file on it and watch the progress bar. No browser and fancy stuff.