You cannot log on to an FTP site or you are redirected to the root folder of the FTP site in IE7
"There are two main methods to use FTP in Windows. One method uses Windows Explorer to browse FTP sites by using a folder-based interface. By default, Internet Explorer uses this method. The other method uses an implementation in Internet Explorer that is based on the WinINet API. When you use this method, you browse FTP sites in Internet Explorer in the same manner that you browse Web sites.
Versions of Internet Explorer that are earlier than Internet Explorer 7 are not separate from the rest of Windows. Internet Explorer and the rest of Windows just have different entry points in the user interface. When you browse an FTP site in Internet Explorer, the FTP site opens in Windows Explorer. Windows supports home directories and the relative path of the FTP URL. Therefore, after you enter the user name and the password, you are redirected to an assigned folder according to the user name. This assigned folder appears as the root of the FTP server.
Internet Explorer 7 is separate from the rest of Windows. Therefore, when you use Internet Explorer 7 to access an FTP site, the behavior differs from the behavior of earlier versions of Internet Explorer. Internet Explorer does not support home directories and the relative path of the FTP URL. Therefore, you are redirected to the root folder of the FTP server. If you do not have permission to access the root folder, you cannot access the FTP site.
For more information, click the following article number to view the article in the Microsoft Knowledge Base:
Separation of Internet Explorer 7 from the Windows shell"
To work around this issue, follow these steps:
1. Start Internet Explorer.
2. Click Tools, and then click Internet Options.
3. Click the Advanced tab.
4. Under Browsing, Click to select the Enable FTP folder view (outside of Internet Explorer) check box, and then click OK.
5. In Windows Explorer, enter the URL of the FTP site, and then press ENTER.