If all they need is FTP access to that domain, then it's easy. Create a new User in Users -> Manage Users. Then create a new Fully Hosted Domain in Domains -> Manage Domains. Don't put their site folder in your own webspace because they'll need your access to get to it.
For databases, during creation, it'll ask you for the database user, database name, and database hostname. These are all independent of the FTP users. Fortunately, we're allowed "unlimited" users and domains, so it's easy to set up stuff for others. Just remember that it's your account and you're ultimately responsible for all content.