@ the fugly screensshot
Exactly the same as using 2 finder windows (and less fugly).
Use list view in OS X.
Amen.
For anyone new to the Finder, here's a couple of tips:
Open 2 windows side by side in list view
From the View menu select Show Path Bar
Use Command Up arrow/Down arrow to navigate the folder structure
Use Command ~ (tilde) to switch focus
It's not perfect but, come on, is it really that hard?