I'm using Windows XP. I'm connecting to a UNIX box using PuTTY SSH (ksh).
Now I want to copy a text file present in remote host to my local system.
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psftp from the PuTTY site and transfer the file with it.
You can use WinSCP, a free SFTP and FTP client for Windows.
Not sure why nobody has pointed this out, but if you want to FTP from A to B, and B to A, you'd need to put an FTP server on each computer. That's easy enough.
However, another thing you can do is not as simple. And perhaps (my?) terminology gets mirky here, but if you only want to initiate the connection from the end where the server is, then there's a way with SSH to do a reverse connection, where instead of client initiating the connection to the server, you have the server initiating the connection to a listening process on the other computer.
There are quite a few resources online about making a reverse connection with SSH. I think you can set it up as a SOCKS proxy and have any general type of server like FTP, use it over a reverse connection. I did something like it once – at least that's at best a general idea: SSH tunnel reverse connection.