Google and Yahoo! were already taken and fefoo was the next best bet :D
Other than that there is no special reason or meaning of the name. At least not that I know of right now. Unless it is a profanity in some language it should be a good name. I was searching for "foobar" and suggestions with that name. And somehow "fefoo" sounds a bit like foobar.
After that the name kind of got stuck. Now that I think about it. Its been four years since I first thought of something like fefoo, that was even before I had a name for it.
Last week I released the first beta and hopefully this week the second beta will be out. After using a new bug management and project management system things have been progressing quite fast. I still have a few bugs open before I can launch the next beta.
Here is hoping that it happens this week. :)