useradd -s /bin/false -g ftpgroup -d /ftphomedir -p password user
'-s /bin/false' means the user gets no shell, so he can't login to the box (except through FTP).
'-d /ftphomedir' should point to the FTP's rootdirectory, the directory users log into.
'-g ftpgroup' is the group FTP-users are in (if any).