bluejupiter: I see your dilemna... I don't know how easy it would be modify/rewrite the proxy so that it worked on your server instead of the client desktop (ie. clients FTP you > you HTTP nirvanix). It's a little bandwidth heavy (client > you > nirvanix), but it keeps your clients in their familiar FTP world. Interestingly, infinite bits has done something similar for S3 (I wonder how hard it would be to convince them to build a Nirvanix fork of it?).
On the end-user side, I'd also love to see some of the popular FTP software support Nirvanix as they have started supporting S3 (ForkLift and Transmit on Mac), or see a port of JungleDisk. Those developers might need some motivation, though (Barry, $$??).
Lastly, another S3 tool that would be great to see a port/fork of is the jetS3t java application set, which is (predominantly) aimed at service providers (like you, bluejupiter?) - your server fetches tokens & helps authentication, but the client uploads directly to S3. It's as ugly as the next Java application, but it is extensible and actually seems to run pretty well on the average Mac or PC... again, Barry, it would be great to see those developers supported/encouraged to add Nirvanix support as the approach suits both Nirvanix and service providers building on your service (although it admittedly doesn't address bluejupiter's gripe with making their clients install yet another custom app).