If you find Finder frustratingly limited, then you’ll be in the market for a replacement/enhancement tool. There are plenty of paid-for Finder enhancements out there, but over the past year or so they’ve been increasingly put to the shade by a fabulous – and rapidly developing – free tool called XtraFinder 0.16.1.

We’ve been checking back occasionally to see how XtraFinder is developing, and with version 0.16.1 now out, there have been a staggering 20 updates since we last looked at it back in September, so we thought it was the perfect time to bring you up to speed.

At its heart, XtraFinder adds two key tools to Finder windows to instantly make them more appealing: tabs and dual-panel windows. This makes it easy to browse multiple folders without opening a chaotic mess of separate windows, while dual-paned windows simplify the task of moving or copying files between two locations.

XtraFinder continues to evolve great new features.

Since version 0.8.4 was released, the app has continued to add features and improve stability at a frightening pace – we use it daily on our Mac in preference to Finder itself, and have rarely run into problems with it. If you’ve held off installing XtraFinder since our last report, here are some of the new features that may tempt you to finally give it a whirl.

The tabs feature has improved significantly – not only is dragging the tab’s actual icon now supported, but you can also drop files on a tab to move them to its location. When in dual-panel mode, you can opt to show just one Sidebar to free up screen real-estate, plus middle-clicking on a Sidebar shortcut opens that location in its own tab. It’s also now possible to reopen closed tabs and even the Finder window itself.

You can also customise the tabs themselves: a new Opera option sits alongside the default Google Chrome look, while a narrow tabs option displays the tabs alongside the close/maximise/hide buttons rather than beneath them.

A number of new shortcuts have been added to the Finder menus: open a new Terminal (or iTerm/XTerm) window to the current location, hide the desktop and create a symbolic link. Another option allows users to customise the New File templates, while the Refresh option for refreshing a window’s contents can now be evoked from the context menu.

Other options include being able to have the Name column adjust automatically depending on contents, plus you can opt to add XtraFinder’s own functions to the toolbar and restore the colourful Sidebar icons to Lion and Mountain Lion. You can even customise the background and text colour of the Finder window itself.

Thankfully, despite the ever-increasing feature list, Trank Ny Am Software is sensible enough to make sure they’re all optional, so you can pick choose exactly which bits of XtraFinder you want, ensuring it works to your specifications and not the other way round.

XtraFinder 0.16.1 is available now as a freeware download for Macs running OS X 10.6 or later.