It might help to understand what that installation manual section is all about, what the FTP layer/user does, and why it is needed. Per the opening paragraph of that help screen:
The “short version” of this, for DreamHost users, is that you don’t not need to concern yourself with this at all, or even setup the “FTP layer”. The Joomla FTP layer discussed in that manual section is designed to provide a “workaround” for those on hosts running PHP in safe mode, or other less “elegantly” implemented PHP environments.
On DreamHost, where Joomla! runs under PHP-CGI and suEXEC, the Joomla! program itself has all the same permissions and privileges as your own FTP user, and therefore it can do anything you can do . This differs from systems where PHP is run as an apache module, which would cause Joomla! to run as the webserver’s user (often “nobody”, but “dhapache” on Dreamhost). What this means to you is that all that “file system manipulation”, the upload and install processes, and the Media manager all do their work as you, so no special user or FTP layer is required at all for any “authorized Users” to use them!
In a sense, while within the Joomla interface, they are all “you” to the system - Joomla! itself manages who can do what by the privileges you assign to a Joomla! user.
In short - you should just ignore this for Joomla running on DreamHost shared servers, because it simply is nott applicable. How’s that for “easy”?
That is, in fact, how it is supposed to work on Dreamhost, and that is a good thing because it is an important part of the *nix security model and makes for a much safe environment on a shared host.
There is a lot more information about all of that in the DreamHost wiki:
As I mentioned earlier, none of that is needed for Joomla! on DreamHost - all the Joomla! functions will “just work” without an “FTP layer” at all if Joomla is properly installed.