FTP transmits its password in the clear. You can use a much safer process with both dreamhost and dreamweaver by using SFTP. On panel on dreamhost, edit the user of the website your using and select ssh and ftp access and click the box labelled disallow FTP. On dreamweaver edit your site and under remote information click on the box labelled 'Use Secure FTP (SFTP)'.
This will mean that no one can access your dreamhost user using 'in the clear' passwords, and dreamweaver will merrily use SFTP without any issue.