I am evaluating phpED.

I have Apache (my testing server) running locally on Windows. I can't get my files to transfer from my project files to my testing server.

For example,
Project files at: C:\MySite
Testing Server at: C:\Apache Group\Apache\htdocs

Isn't there a local\network option for File Transfer Accounts, seems illogical not to be there with FTP and WebDAV? How do I upload files locally? All the options are disabled when I right-click to upload a file.

I have checked the manual, FAQs, and web searched. If it is in the manual I apologize but it is not easily searchable in the help section...

If Apache's files (htdocs) are available with the local network, open Drive mapping (assign a drive letter for this) and specify project root pointing to this directory.
In other words, you don't need to transfer files across your local network.