FTP user redirection fails

I have set up an FTP site in IIS 6 with local user redirection.

Default Home Directory: C:\ftp
Virtual directories are created: C:\domain\<localusername>

When I login with the local username the redirection does not work. If I don't have C:\ftp:\<localusername> then I can't login (path not found) ... filemon shows that it is looking for C:\ftp:\<localusername>. And when I create the C:\ftp:\<localusername> then I get dropped in C:\ftp\<localusername> instead of C:\domain\<localusername>

I wonder if anyone has experienced this and have figured out why it might be ... or what to check ...

It should not be user rights issue as for testing purposes I have given the local user full rights to C:\domain and C:\ftp

Any idea?

Thanks.