This post is targeted at helping IIS Administrators understand how to setup FTP User Isolation and Active Directory together. There has been forum posts @ http://forums.iis.net regarding user isolation and Active Directory. It is pretty straight forward, there are some initial configuration steps and a couple concepts to understand.
Steve Schofield
Microsoft MVP – IIS
PS: There is a lot of good information on how to setup and use the FTP 7.0 service here
http://learn.iis.net/page.aspx/356/ftp-7-for-iis-70/