PanelFM helps you to quickly browse through the files and directories on your local disk. It is not intended to replace a file manager, but rather complement it by providing a minimal interface for speeding up the task of locating and opening a file or directory.
By default, the only entry in the popup menu when you click on the panel applet is your home directory. Moving the mouse over that pops up a submenu with a list of all files and directories in your home directory, and so on. Each menu that pops up for a directory has two menu items at the top that allow you to open that directory in the default file manager or gnome-terminal (gnome-terminal and Nautilus as of now).
You can have additional root points in the main menu by creating a .panelfmrc in your home directory, containing a full pathname for each root point on each line. Standard UNIX permissions apply, so you can only browse directories for which you have adequate permissions.
PanelFM was inspired by File Menu Applet (http://www.zoned.net:81/~xkahn/file_menu_applet/), which seems to be dead now.