Currently Being ModeratedFeb 1, 2013 9:59 AM (in response to macmartin)
For the raw answer:
and note the comments at the top of the file, notably:
# List of acceptable shells for chpass(1).
# Ftpd will not allow users to connect who are not using
# one of these shells.
Since you set your UserShell to /bin/false, and /bin/false is not listed as a valid shell in /etc/shells, your user cannot log in to the server.
Typical OSes include a dummy shell, typically /bin/ftponly or /sbin/nologin which you can use for such accounts, but you'll still need to add them to /etc/shells if they're not listed there.