With all the links you have been offerred, if it still isn’t clear, I’m not sure what to tell you. I’m also not clear why you would want the beta testers to access via ftp, as opposed to just having them download the files from a web directory via http.
It is your site, and you should do it the way you want to do it, but that is going to be difficult if you don’t understand what is involved.
If the goal is to simply provide a password protected way for beta testers to download beta files, I would suggest that “simpler is better”: set up a directory under your domain (for example path of /home/yourusername/thefourthage.org/beta ,which will result in a url of “http://www.thefourthage.org/beta” being reachable from the web), and protect that from the general public by making it a password-protected directory using .htaccess.
You can either do the .htaccess stuff yourself (not reccommended in this case, as you indicated you and your friend had already tried that, and it didn’t work), or you can use the control panel to manage the .htaccess process for you. After clicking the preceeding link:
1 - select your domain (I suppose it is thefourth.org),
2 - enter the name of the directory where indicated,
3 - “check” the box next to "Password-protect this dir?"
4 - make sure the “Enable Webdav?” box is not checked
5 - Enter a “name” for the “Pop-up box” to display
6 - enter one or more user password combinations
7 - leave the following section blank (you shouldn’t need it for your purpose)
8 - click the “Configure This Directory” submit button at the bottom of the page.
Wait 10 minutes or so for it to “kick in” - be patient, it might take longer.
Now when you browse to that directory by entering http://thefourthage.org/beta, or whatever you named it, you will be presented with a user/password authentication box. Type in the correct info and you will be taken to the directory.
To put the files in the directory, FTP them to that directory, using your user account.
This will make it easy for you to manage the files, allow you to limit access to them to those to whom you have provided a user/password, and greatly simplify your life.
Unless you need other users to be able to upload their own “betas”, the whole extra ftp user/re-map sub-directory, dance is completely unnecessary.