Nice tranglos, I always love your posts.
I'm a big DOpus user, and I've used the virtual file system it has. They are called collections in Dopus. now, I haven't used it extensively, so i can't answer all your questions, especially the ones about how it works behind the scenes. Here's what I know:
--You can see the collections only in DOpus. So you won't be able to use it with other file managers, including Explorer.
--I don't know where or how the collections are stored, but you access them with the prefix "coll://"
--The files are really virtual, so no extra copies or anything are made. yeah, that would tick me off too if a virtual system made duplicates.
--In the virtual system, you can have hierarchy. And it will either inherit the physical folder structure of the actual files, or you can make your own virtual hierarchy totally unrelated to anything physical. Furthermore, when you drag a folder into it, you can choose whether to inherit to the physical structure, or to merely link to that folder. The difference is that if you link, and then you double click on the folder, it will take you to the physical folder's location. If you inherit the folder structure, then when you double-click on the folder, you'll be taken to a virtual sub-folder that mimics the actual folder, but you're still in the virtual system. See the screenshot below:

--I don't know about scripts and stuff. DOpus is very configurable, so I think you can do a lot, I just don't know how at this point. I'm pretty certain you can apply the normal DOpus scripts to virtual folders. if that's the case, you should be able to do a lot of things.