I've some mock-up for this locally already (but it's based on jstree instead of fancytree). I think the best approach is to have just an input field with path auto-completion and a button next to it ("select" or the like) which opens a popup (AdminLTE pop-ups are really nice) with the tree, so one can navigate and select one (once selected, pop-up is closed).

I've assigned myself, as most of this is already in a local branch somewhere.

sounds good to me!

this is now implemented by the "compact" widget.