To my complete and utter horror I discovered a serious bug in iWeb that results in potential data loss of any files or folders ... here is the brief story.
I created an application and had all the source files in a folder on the desktop named, for this example, My Great Application. I had put months of work in to this baby; endless hours! Once the application was complete, I decided I needed a web site to display it. Not being a web designer, I decided iWeb would be a quick way to make a site. I called the new site, yes, you guessed it, My Great Application (the site name is set in the Site tab of the Inspector panel).
Once my web site was complete, I used the "Publish To A Folder" option and saved it to the desktop. Imagine my disbelief when iWeb decided the folder containing all my source code must contain an old version of the site I was publishing and deleted it -- all gone, replaced by iWeb's HTML and images. I was not warned the folder already existed, and the save dialogue box did not indicate that iWeb would create a folder with that name. This is a major bug, and you should be aware of it if you're using iWeb.
Luckily I had a backup on an external drive and also on a pen drive -- others may not be so lucky.
[robg adds: I tested this, and it's definitely an issue -- the contents of any existing folder of the same name will simply vanish without warning.]
Mac OS X Hints
http://hints.macworld.com/article.php?story=20061215082248744