The development of Flory-Huggins (FH) theory is reviewed, particularly with regard to the molecular significance of the interaction parameter that scales the contact interaction of solute and solvent. The chemical potential given by FH theory for an "idealute" solute is then compared with that provided by a more general, statistical thermodynamic approach. It is found that the FH contact term does not directly correspond to the solvation free energy. The significance of this result for the interpretation of free energies of transfer of a solute from one solvent to another is examined. It is shown that neither the earlier recommended standard free energy change for the process (using the infinitely dilute reference state, mole fraction units) nor the recently recommended FH-corrected standard free energy change provides the solvation energy desired. Instead, the standard free energy using the infinitely dilute reference state and molarity units, as long advocated by Ben-Naim, provides the desired solvation free energy. Correction of extant values, based on mole fraction units, is easily made. However, application of such results to problems of protein folding is not straightforward.