What exactly does Fuse do?
OSXFUSE allows you to extend OS X's native file-handling capabilities via third-party file systems. It is a successor to MacFUSE, which is no longer being maintained.
As a user, installing the OSXFUSE software package will let you use any third-party file system written atop OSXFUSE or MacFUSE, if you choose to install the MacFUSE compatibility layer. As a developer, you can use the OSXFUSE SDK to write numerous types of file systems as regular user-space programs. The content of these file systems can come from anywhere: from the local disk, from across the network, from memory, or any other combination of sources.
And please don't ask me what that means.