Ahh shoot, the logs! Sorry, thats one thing I didn't check. Unfortunatly I'm at work so I'll check them tonight when I get back but in the mean time..
I checked over
ftpd(8) again to see if I missed anything but it all seems to be in check. I am wondering though if the accounts need to be in the wheel group? The daemon needs to be super-user, so would the ftp accounts go into wheel? This seems unlikely to me..
I guess I'll have to wait till I get home, haha. Thanks for your help guys!
EDIT:
Oh I forgot, the root account was only possible because I commented it out in /etc/ftpusers. It didn't stay that way for long, just a quick test ;p