You need to give User2 permission to list the Default FTP site's root directory.
Rule #2: The username used to log in needs List permissions to the root FTP site folder
Even if the Virtual Directory is pointing to a different location, the user that is logging in always needs List permissions to the folder specified in Default FTP Site.
Have a look at the following website for more information
http://weblogs.asp.net/owscott/archive/2004/02/05/68423.aspx