Thanks for your help!
I just read regarding UNIX Groups on Dreamhost's Wiki and they said some (not all?) servers have a group limit of 16, so as soon as I get 16 clients and/or freelancers, it might not work for me grabbing their files.
I think I am going to create 1 sub-domain, 2 new users, give the FTP details out to my trusted regular clients and freelancers of 1 user account then just delete the files as I go.
The second account can be for new clients and freelancers and I can change the password on that user account from the panel, each time I think it needs to, to ensure they don't access the sub-domain. That way, I can ensure they can't access anything out of that sub-domain and I can still install net2ftp so that clients whom aren't sure of FTP software can easily log in and transfer. I'll do the custom php.ini file thing to ensure they can upload a large file too.
Thanks for the suggestions!
I'm concerned over the Terms of Service now though...