I have encountered many questions about setting up multiple FTP sites in IIS7 so that individual users can access different ftp root locations. There is no reason to use Virtual Host Names and multiple sites to accomplish this goal. IIS7 can provide this functionality using a single FTP site while ensuring that users only have access to a specific directory.
For starters, the Web Server (IIS) role and the FTP Server, FTP Service, and FTP Extensibility Role Services will need to be installed. This is done from within Server Manager.
I created a new FTP site named MainFTP and pointed it to c:\inetpub\ftproot. I also selected All Unassigned for the IP Address and No SSL for simplicity. Select Basic as the Authentication method and Allow access to Specified users. You have to enter one user to be able to proceed. I setup my local user account for this walk-through. I also enabled both Read and Write permissions. Once the site has been created, click on the MainFTP entry under Sites to open the Features View and double click on FTP User Isolation.
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