Files and Folder Sync is part of the Sync applet of PC Suite (also used to Sync Contacts, Calendar, Bookmarks etc.). It allows you to specify a folder on your PC to be kept in-sync with a folder on your phone. This allows you to easily use the same documents on your phone and PC (and also acts as a handy way to get multiple document files to your phone).
As you can see from the screenshot below you can specify the folder you wish to sync, whether to sync to internal or external memory on the phone and place a maximum size limit on files which are synced.

Clearly file sync is most useful if you regularly edit documents and spreadsheets on your phone, but is also useful as a general file transfer mechanism. Sync is dictated by date - it is not possible to integrate two files - the newest file (whether on phone or PC) will take precedence.
You can download PC Suite from here.
Thanks to Thanks to Into Mobile's Stefan and AI for pointing us towards this story.