I use vsFTPd on my linux box and I have local users who logon only via FTP.

I want to keep these users in their respective home directory.

When the user logs on via FTP the user ends up in /home/[username]

There's only FTP-access for them.

I don't want the user to be able to se the other user directories(in /home/). I aslo don't want the user to be able to download configuration files and such for variuos reasons.

I would really like to create a virtual root for my system, so the user sees that he's in / when he's actually in "/home/user"

Use either:
chroot_list_enable
chroot_local_user

depending on the number of users you want to chroot. Look at "man vsftpd.conf" for more info.