Iceman,
Okay. Here is the same answer you got above, but with a bit more explanation. FTP-ing into an ibay using the ibayname as the username and the ibay's password will log you in as an anonymous FTP user. Anonymous usrs will not be able to upload files. Uploading requires that you log in as an actual user.
Possible solutions:
1. Make them log in a cd to the appropriate directory.
2. Create a user... not an ibay... and make them log into the user's directory.
I think #2 is going to work for me.