Found out your built-in FTP server isn't running as it did, after you activated the Firewall and even opened up the 20 and 21 IP ports, too? The built-in FTP server in 10.2, when using passive mode file transfers, opens an IP port which can be any one number between 1024 and 65534; the IANA registered ports for passive FTP are 49152 to 65534.
If you don't use an IP firewall (IPFW), you wouldn't notice this, but when the IPFW is switched on (specially on the server version), you find out that the whole FTP server does it's work only halfway. You can connect and get the first directory listing, but not any other listing, and starting a file transfer fails. Why, because in the IPFW we normally add only the two standard FTP ports 20 (listing) and 21(active file transfer) to open up holes to allow connections to the FTP Server.
In the Server Admin Tools, only these two IP ports are mentioned. With the Tool, you can't even set up the needed IP port range. This means without using the terminal and configuring the IPFW directly, you can't use the the FTP Server and IPFW together. It's one or the other "out-of-the-box!" After a lot of trial and error, and google'ing on the net, I found the following solution.
The first thing I found out was that the Mac OS X built-in FTP Server is not Apple's own design, it's actually an adapted WU-FTPD source to integrate it better with MacOS X. Second thing, after finding it's a WU-FTPD version, in the user manual (man files) on their website, there's an option to lock down the IP port range for passive FTP file transfers with the command passive ports cidr min max, which needs to be added to the /Library -> FTPServer -> Configuration -> ftpaccess config file. The third thing I found is that opening the firewall for the IANA registered ports for passive FTP mentioned above.
This was the short version of what needs to be done to get the FTP Server working correctly again.
A full version How-To, with all the command line entries, can be found here. Hope this post is some help to other Server Admins whose FTP server isn't working correctly.
Mac OS X Hints
http://hints.macworld.com/article.php?story=20030806073309188