I have multiple sites on the same IIS 7.5 server. Using the handy Bindings... feature, I am able to redirect incoming :80 HTTP queries to the appropriate server with ease.
On more than one site I have added FTP (File Transfer Protocol) to ease publishing.
I kept getting a 530 error when attempting to log users in.
I found that adding the domain name followed by a | (vertical bar) before the username solved this issue
<binding name>|<username> as the FTP user name, and it worked.
This IIS forum post may also be of use.