I have installed proftpd-1.2.5rc1-1. I renamed the basic.conf to proftpd.conf and put it in the /etc directory.
When I try to logon as anonymous it says:
331 Anonymous login ok, send your complete email address as your password.
I type a e-mail address in for passoword and I get:
530 Login incorrect.
Login failed.

I look in my log files and there is an error stating:
Feb 12 16:56:21 hostname proftpd[12321] Hostname (Hostname[IP Address]): no such user 'anonymous'.

I have tried just for testing, creating a local user "anonymous" and I get the same errors.

Thanks for any help.

Well the user anonymous never exists. If you look in that configuration file in the anonymous section you should see a line like:
UserAlias anonymous ftp

This makes anonymous be the alias for ftp. So actually you should have a user named ftp. My ftp user doesn't have a valid shell because I don't want people to be able to login normally with that account. So I had to add another line to be able to get the ftp account to log in:
RequireValidShell off

I think you can also usually set the shell to /bin/false which would be a valid shell to ftp but wouldn't allow users to login.

I added the "RequireValidShell off" line, and all is working now.

Thanks a lot.

-Keith