Checking if a file exists then do something if it's not a directory

You can actually omit fs.exists(). The fs.stat() will return an error when the item you are testing is not there. You can scavenge through the err object that fs.stat() returns to see what error caused it. As I remember, when fs.stat() stats a non-existing entry, it returns an ENOENT, no such file or directory error.

And so:

var fs = require('fs')
  , filename = process.args[2]
  ;

fs.stat(filename, function(err, stats) { 
  if(err){
    //doing what I call "early return" pattern or basically "blacklisting"
    //we stop errors at this block and prevent further execution of code

    //in here, do something like check what error was returned
    switch(err.code){
      case 'ENOENT':
        console.log(filename + ' does not exist');
        break;
      ...
    }
    //of course you should not proceed so you should return
    return;
  }

  //back there, we handled the error and blocked execution
  //beyond this line, we assume there's no error and proceed

  if (stats.isDirectory()) {
    console.log(filename + ": is a directory");
  } else {
    console.log(filename);
  }
});

So essentially, we reduced the number of indents caused by callbacks and also reduced it by restructuring if-else statements