Why bother with Lion's FTP server which Apple removed the GUI controls. Plain old FTP is not secure. Everything gets transmitted in the clear including passwords.
Why not try Pure-ftpd Manager 1.8 (GUI)? It installs pure-ftpd 1.0.21. However pure-ftpd 1.0.21 has some issues with securing the entire session, but at least encrypts passwords.
This can be corrected after you install Pure-ftpd Manager 1.8(GUI) for Mac by installing pure-ftpd 1.0.32.
Note in order to install pure-ftpd 1.0.32, you'll need to install Xcode for Lion.
Run Terminal
In the Terminal paste this:
find /usr/local -type f -name 'pure-*' | tar -czf pure-ftpd_backup.tgz -T -
curl -O 'http://download.pureftpd.org/pub/pure-ftpd/releases/pure-ftpd-1.0.32.tar.gz'
tar xzf pure-ftpd-1.0.32.tar.gz
cd pure-ftpd-1.0.32
./configure --with-everything --with-tls --with-certfile=/etc/pure-ftpd/ssl/pure-ftpd.pem --sysconfdir=/etc/pure-ftpd/ --with-sysquotas --mandir /usr/local/man --with-pam --with-virtualchroot --with-peruserlimits --with-ldap --with-rfc2640
make
sudo make install-strip
cd ..
rm -r pure-ftpd-1.0.32.tar.gz pure-ftpd-1.0.32
NOTE: ./configure .......... --with-rfc2640 (should be all one line)
Once you compiled this, FTP with SSL/TLS (FTPS) sessions will be secure.
You can download Pure-ftpd Manager 1.8 at
http://jeanmatthieu.free.fr/pureftpd/