It can remove files, and folders with files in them. You can also drag 'n' drop files and folders onto its window to have them in the list for secure deletion. Also it wipes clean the free space better than anything I've ever used and actually it's the only erasing program I've used that seems to actually wipe the free space.
As a confirmation I look for deleted files in Recuva after Eraser is done doing a free space wipe, and Recuva doesn't turn up much of anything whereas with every other free space wipers even the commercial variety that I've tried they don't seem to do anything at all.
If you're only interested in Eraser without committing to a full install give
Eraser Portable a try. I'm giving you a tip to try the portable version because the setup version installs a bunch of stuff including some WinSxS entries and you'd definitely want to track the installation of it.