Very new to this and need some help...

I'm trying to setup user accounts on my server using Webmin...

Each user I set up should only have access to their folder and any folder they create under theirs when they log into the server using SSH Putty...

They shouldn't be able to change directories out of their own folder( eg. cd / )

How can I do this???

Why would you want to prevent them CDing out of their own directory? They won't be able to write to any other files or read the contents of anyone else's directory anyway. I don't think it's possible to do what you're asking, unless you were to run chroot and limit them to their own directory, but then they would most likely lose access to any global programs or libraries - not very useful!

I know its possible... I rented a game server before and I was limited to only my directory...

Lets say this for example: I want to be able to provide space for individual users (for a website, or a game server)....they should only have access to their folder (eg. /home/user )...They can upload to their folder via FTP and run commands from only their folder....shouldn't be able to access other folders....

i did something similar at home: let's say i have a folder called 'mp3' which i want to prevent access from other users, except me.
then as root:

chmod 700 mp3

and

chown rockmanexe mp3

now only my user account 'rockmanexe' (and root of course) can access those files and subdirectories created within. If another user want to access via konqueror or command line, a 'permision denied' message appears
This could only apply to user's home folders tho, i don't know how to prevent access to the entire system folders, but by default users can't modify system files.

Hope this helps