This project has been on the back burner for some time, but I am planning on releasing version 2.0 of The Magic Folder in the coming month. 
I am trying to work out some technical difficulties with the updates, but as soon as I figure them out I will be posting the update. Here is what is planned new for the next release:
- Watch Folder – a folder (c:\Users\<userName>\The Magic Folder) will be placed on your system where you can save files from applications or for downloading items from the web. Anything placed in this folder will cause The Magic Folder to jump into action and do its thing.
NOTE: Unfortunately, this feature will only be available with the File Extensions option enabled.
NOTE: In further updates I plan on possibly adding the option to place this folder in another location. I want to get feedback on the feature first, before I begin to customize the gadget further. - More folder icons to choose from (styles).
- Small enhancements under the hood to make the experience faster/better.
The big change as you can see if the Watch Folder. This is actually a large technical change but I am getting close to completing it. 
Hi David, Trying to monitor my desktop in Windows 7 – how do I change the watch folder to this path?
Thanks Johan
Hi Johan! Sorry, but there is not an option to change the Watched Folder path. Thanks! -David
Love this app – so useful – thanks so much for creating it – it’s absolutely brilliant. Nice one. Merry Christmas dude!