Drupal 7, how to programmatically download files, optionally save them as managed files, save them to a node, and create directories at the same time!

UPDATE:

Based on some comments below, I have updated the function with a sligtly more drupalesck approach. Thanks for the comments!

The previous version of this function had a bug where it would create a directory called public:/ in your webroot directory. Watch out, that being there can cause file upload problems. Make sure you delete that directory.

Original Article: