In reference to these two posts on Mac OS X Hints...
Be aware of possible data loss with TextEdit's Save dialog
and
Be aware of possible data loss when saving from iWeb
Those aren't even the worst of it. Try this on for size with Finder, or even Path Finder.
1. Create two folders on your desktop. For my example one is "fu" and the other "bar."
2. Put some sample random files into "fu." (Or even copies of your thesis or resumes in order to prove the point.)
3. Save a document (or just make a new TextEdit document) called "fu" into "bar" or wherever you like, just not the desktop quite yet. Once saved, strip the file of its extension if it has one.
4. Now move the document "fu" onto the desktop. Tell the Finder that you do indeed want to replace.
Presto; you just lost your "fu" folder and everything inside it to a single measly little file. You have been seriously fubared. Hope you made backups...
You NEVER, EVER overwrite directories with files. Try the same thing at the command line and see how far you get.
PS. It's the same flaw from Safari build 48 that trashed users' home folders.
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