I need to create a site that will allow approved users to upload and download files by ftp. I don't want the directories visible through http transfers and I only want a small group of users who I set up to have access to the site at all.
Could someone walk me through how to do this?
I wouldn't use FTP at all, given DreamHosts suEXEC setup and resultant permissions complications.
I suggest you simply protect a directory via .htaccess apache authentication and provide an upload utility/file manager script.