What is the function of /home in Snow Leopard?
It's got an NFS automounter map mounted on it, so NFS home directories will be automatically available there.  Quoting man auto_master:


  The auto_master file contains a list of the directories that are to be
  automounted.  Associated with each directory is the name of a map that
  lists the locations of the filesystems to be automounted there.  The
  default map looks like this:

#
# Automounter master map
#
+auto_master            # Use directory service
/net                    -hosts          -nobrowse,hidefromfinder,nosuid
/home                   auto_home       -nobrowse,hidefromfinder
/Network/Servers        -fstab
/-                      -static



The default auto_home on SL expects to get the home directory-to-machine mapping from NIS or LDAP, but you can add entries manually.

You can remove the auto_home line from /etc/auto_master and sudo killall automountd (which should cause launchd to rerun it with the new map) or reboot.  Alternately, add your sshfs mount to /etc/auto_home (and again restart automountd or reboot).