it's been a little while since i posted, don't worry, i've not forgotten about this...
i'm currently working on a kernel mode ftp server, which is about 60% finished. the biggest hurdle is the lack of c runtime functions in the kernel, so i have opted to write my own c runtime library, so that i can port an existing ftpd directly, rather than write my own one using kernel specific api.
This route is more work up front, but the longer term gains should be greater - since you will be able to port more server apps to the kernel with fewer problems going forward.
Now, before some people start flaming me again, bear in mind that a kernel mode ftp server is not such a contraversal idea - it's not that different to a kernel mode web server (which are pretty common these days on linux, and even MS have IIS.sys now).

Awesome, looking forward to seeing more of your fine work.
What would be some of the benefits to having the ftp server work in kernel mode?