I'm using 3.2.0 now, but first experienced it with the previous version (3.1.6?).
When uploading a file that already exists on the server, I choose the rename action and append '.new' to the filename. When I click OK, I'm once again prompted with Target File Exists even though no file with that name (the one with .new tacked on the end) exists on the server. I can choose the Overwrite action this time and the file is uploaded with the .new name so this is really just an inconvenience.
I haven't used the non-portableapp version of FileZilla so I can't say if this issue exists in that version or is specific to the portableapp version.
[Edited for transposed digits in minor version numbers]