I learned from a Japanese friend that ふむふむ could be translated like "oh, I got it", "I see", "I know", or "ok". It could be also in this form: ふむふむ なるほど
But, my sister lived in Japan for 5 years, and she had never heard of it.
Is it still used?
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Friends and I quite often use "ふむ" (just once) in electronic communications in order to show acknowledgement, though with a very slight nuance of reluctance or thoughtful consideration.
Here's an example from a native Japanese speaker, after hearing about the context of a quiproquo:
Though it's not "I know", it's definitely "OK", "I see" or something like that.
I use ふむ as well. Seldom ふむふむ. I think that's true for many people. I don't know how to put this well, but basically it sounds a bit.. um.. ridiculous maybe?
You see it often in manga.
I think Sexy Commando says either "ふむふむ、なるなる..." or"なるふむなるふむ" while reading a newspaper in one episode. Obviously, this is a humorous use.
BTW, I have a great related oyaji gag: I put out my hand to see if it was raining. By chance, a bird flew overhead just then and dropped some poop, which fell into my hand. I looked at it and said ふーーん?
A Japanese friend I started talking to two days ago (he's 27) uses ふむふむ with me when we write to each other. Sorry, I don't remember where in Japan he's from.