In reply to:
now for a silly question...what is the point of making a user and having them upload files to their own folder? if only they can use it?
Well, it's not really a "silly" question, but you have answered it for yourself: so *they* can use it. That is a legitimate use for many, even though it does not appear to be what *you* want to do. It is not also not really true that only they can "use" it, which has to do with how they set the permisiions on the directories and files. That, however, gets into the "pretty technical stuff" I talked about before (you might want to read through Unix Groups and Unix File Permissions (on Dreamhost Wiki), particularly the "Other Resources" section of File Premission (The FIle Permissions "cookbook"))to get a better understanding of what is involved. I suspect you won't want to jump right end to setting this up for your site 
, but it might give you a better understanding of the logic behind how Unix/Linux filesystems are set up.
In reply to:
i'm looking at this as someone trying to set up a website where i can just say okey user 1 and user 2 i need you to upload to folder 2, and then i don't have to do anything else...its ready on my site.
As you have started to realize, that just won't work with the approach you are taking. Even if you tackle, and master, the group permissions management, absent some scripting, the files they upload will *still* need to be "linked" from, or listable from, a "web accessible" space (either web pages -http, or ftp files -ftp site), which has to be reachable from an IP address or a Domain name with a DNS record. Simply setting up a user with ftp space and ftp rights does not accomplish this; it gives them space on your server to put/retrieve files, and that is all. What you are describing however, or a close variation of it, is what Content Management Systems (CMS) and other "scripts" available on the web are all about.
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i guess i just can't do that with the current DH set up (well maybe this script thing)...so i just don't see a point in having user ftp if i can't access it. *confused*
At least you can't do it the way you invision, as that is not how unix/linux/web serving works. You should also recognize that "access" as you are using it is ambiguous - do you mean "access it as a shell user on the DH system", or "access it from the web", etc. Using a script, as discussed earllier in this thread, *is* the way to do what you describe, and deals with all the "access" ambiguities. You *could* run *everything* from a "user" that you set up for this process, giving yourself, and the other contributors equal access - you all use the same ftp space, and username and password, and the pages are all served as "that user" - you would *not* want to grant that user any more privilges than necessary, and it is *not* a good security model. You could than reserve your own user for "system" and account use only. I *do not* recommend doing this.
In reply to:
2nd - i have tentatively looked at subdomain today...would that work? make a folder as a subdomain and put the ownership into the other users name and get them to ftp to the subdomain folder - would i be able to access that on my site? or would it have the non-viewing problems as i already have?
If you look through the references I have provided, you will see that many of the same issues will apply, as "you" will not own those files. The big difference is that the sub-domain folders *are* web accessible, so I suppose you could consider that a "step closer" to what you want to acheive - you could then "link" to pages/files in those directories from your pages (or include them via a frame/iframe -arguuugh!).
It's a little difficult to give good advice on how to do what you want with only a vague description, such as "access that on my site", as I don't know what you have in mind in the way of "access" and I don't know what "that" is - and it does make a difference in determining the "best" way to accomplish it. First blush, in reviewing all of this, is that you might want to look at one of the Content Management Systems (CMS) out there; DH makes Joomla! (excellent!) available via a "one-click" install. WordPress, while designed as a "blog" system, is also being widely used as a "simple" CMS, and allow for other users to not only upload files, but actually prepare content. It is *also* available via a "one-click" install. With such a system, or a "filemanager" type script, what you want to do is (relatively) easily obtainable.
Carefully structuring unix users, ftp folders, permissions, and other "maintenance" scripts, you can also "make their uploaded files accessible" (from the shell - not necessarily the web) to yourself, but it is *not* trivial and if you think you are confused at this point, I strongly advise against attempting that process. You would learn a lot, but you'll be a while getting any pages "up" on the web! A hammer is the right tool to use only if you are staring at a nail. I think your investigation into all this indicates you should rethink your approach.
You really are in an rather enviable position in all this compared to many of us; when I first started doing this stuff, CMS tools were *completely* outside the reach of all but the wealthiest corporations - hence we had to develop a whole plethora of scripts and such to cobble together the functionality you can now enjoy with a "one-click" install. I say that only so that you are not discouraged about the ftp limitations you are encountering; you have far better tools, that are far more secure, and much better suited for your purpose, available for doing what you want.
Whew! I hope I have not just made it worse - Good Luck
--rlparker