But you don't have to organize your folders that way. I prefer for each domain to have some private folder space completely outside the web folder. I also like to have all of my domains collected in a single folder inside my main FTP root.
So, when I create a domain, I change the web directory from the default:
This also happens to be the same directory layout my TextDrive account has, so it makes it easier for me to switch back and forth between accounts.