I am thinking about purchasing a hosting plan from Dreamhost, which I need for multiple sites. But, I was curious how the multiple domain hosting work? I want to have lets say site1.com and site2.com but host them both on 1 dreamhost account.
Two choices: Either all domains belong to one FTP user, or you create a new FTP user for each domain. Either way is covered by your hosting plan:
I create a new FTP user for each domain in case I want to let someone else manage the domain, plus it keeps my user directory less cluttered. Lots of software puts extra data in your user directory, like /home/user1/domaindata/ and my way makes it less confusing to figure out what directory belongs to which domain.