UPDATE: Now that OSXFUSE is released, use this as the recommended (drop-in) replacement for MacFuse.
Rest is only for historical information.
Now that I have upgraded to Mac OS X Lion, I found that MacFusion does not work. Before diving into a workaround as back in Snow Leopard days I remembered that then it was because of MacFuse and even that time there turned out to be a build floating around the web that would have worked. As is the case now.
This forum listed one of them that got it working for me – macfuse-core-10.5-2.1.9.dmg.
Though, pardsbane here tells of another project – OSXFUSE – one the way that will support Lion out of the box (when the box is released).