okay i had the same problem.
If you aren't able to login or get something like that read my solution
Connected to localhost.
220 ProFTPD 1.2.9rc1 Server (sputnik.landshut.org - FTPServer) [sputnik.landshut.org]
500 AUTH not understood
331 Password required for test-user.
530 Login incorrect.
Remote system type is UNIX.
Using binary mode to transfer files.
I was sure to use the right password but the proftpd wasn't able to read out the passwd and the shadow file (mod was: -rw-------)
One solution was to use the AuthUserFile [path] directive and to create a extra passwd-File for the FTP-User.
The other solution was to change the permissions of the passwd and shadow file (dangerous) to -rw-rw-rw- (-rw-r--r-- should also work)