I had to create a sub-domain and user so I could test out webftp, I have ftp disallowed and random password strings on existing users.
Interestingly, I can't figure out how to display hidden files on dreamhosts webftp. I was able to upload a file named .htaccess but it doesn't show in the directory listing. The more of the story, is don't depend on dreamhosts webftp... use a real client (such as filezilla or winscp) or a firefox addin such as fireftp.
Best practice anyway is to disable ftp and use SFTP.