Builtin FTP, sharing only account, refuses connection.

Im trying to setup FTP sharing since the builtin afp is painfully slow.
The ftp setup works fine, allows normal users to connect and view/download content, but the sharing only accounts are refused, saying the user is not allowed to connect via FTP...??
Ive used a group called FTP and added 2 users, one sharing only, and one normal user.
The normal user works fine, but can navigate the whole file system, including system files, other harddrives and non-shared folders.
This is NOT ok, so i will have to use sharing only-account but first i have to get it to work...
Ive tryed connecting both tru finders connect to server and Transmit (ftp app).
Finder reports error -36 or unknown user, transmit reports "user shared may not use ftp".
everything else works fine but something is terribly wrong..
can anyone PLEASE help me troubleshoot?
both client and server-side are 10.5.1 client.
Client: macbook c2d 2ghz 1gb ram
server: quicksilver 867mhz 768mb ram

Thank you guys for some VERY enlightening answers
I think i got the hang of it
But that must mean that if i can create a shell with only the allowed acccess that i provide, i can prehaps make it auto-mount shared folders aswell?
Or is there prehaps a already builtin "profile" i can use just by selecting it in the shell-links?
if there would be an easy way of creating this, i would definitely think other users could benifit from this aswell
Since this is basicly a unix-fix, there must be similar needs, and prehaps complete solutions that would only need minor work to convert to mac-os?
The ftp-privs appears to need SEVERE work to work properly, since normal user has access to EVERYTHING on the server-machine and not only the sharepoints i see as a HUGE problem and MUST be solved ASAP!
I would imagine that the macosx builtin control isnt that specific so prehaps a ftp-share shell even could be more secure and easier maintained?
So my question is two parts;
1: Is there the easy way out, ready made apps that can do this?
2: if not (or good alternatives) where could i search for other os solution?
I have no problems with adding more logins to the computer, but i would preferably not show them all at login (add other..-button or similar to loginscreen or not visible at all) since its my girlfriends work-computer (my harddrive-stash for my puny 80gb laptop, family and friends) i really need a fast but secure file-sharing..

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