In answer to your questions.
1. No, no need t oedit inittab.
2. No, no need to create users.
3. No, no need to create a user list.
4. No. generally, editing /etc/passwd without using adduser is a bad idea.
5. No, this should all be independent of the mionet process. (I say should but I'm not using mionet so there's always the chance of some interference)
Here's some more detail. I have created a vsftpd installation which allows me to download files. I've disabled anonymous access and don't currently allow uploads as it's another level of complexity. (And you mentioned IE which I don't think allows uploads anyway?) I compiled from source code so some paths are different but I'll explain changes as I go. Any changes in files are highlighted in bold.
First off, here's my /etc/inetd.conf file
netbios-ssn stream tcp nowait root /usr/local/samba/sbin/smbd smbd -s/var/oxsemi/smb.conf -l/var/log -d0
#swat stream tcp nowait root /usr/local/samba/sbin/swat swat -s/var/oxsemi/smb.conf -l/var/log
#tftp dgram udp wait root /usr/sbin/in.tftpd in.tftpd -c -s /tftpboot
#ssh stream tcp nowait root /usr/sbin/sshd sshd -i
#telnet stream tcp nowait root /usr/sbin/telnetd telnetd
ftp stream tcp nowait root /usr/local/sbin/vsftpd /etc/vsftpd.conf
The last line says "If a request comes in on the standard ftp port (22) then run /usr/local/sbin/vsftpd as root using the conf file /etc/vsftpd.conf.
After making the change you should run
root> /etc/init.d/inetd.sh restart
to force the inetd program to reload the config file. inetd is just the program which sits monitoring for requests coming in on port and firing up whatever is specified in this conf file. This is why you don't need to edit the inittab file.
If you've used the optware feed then your vsftpd file will be in a different location which should be reflected in your inetd.conf file. Similarly the conf file may be in a different location too.
And here's my /etc/vsftpd.conf. Again yours may be in /opt/etc or similar? I've removed most of the commented lines to reduce the amount posted here.
# Example config file /etc/vsftpd.conf
#ftpd_banner=Welcome to blah FTP service.
Explanation of the lines I've changed.
- by setting anonymous_enable to NO I don't need to specify another user to pretend to be. So no need to adduser or edit passwd.
- by setting local_enable to YES, then I can log in as me. Again, this means I am essentially logged in as me with my read permissions.
- by setting the nopriv user to www-data, I have picked a user which already exists on the mybook and is relatively "safe". Because www-data exists for running certain web/lighttpd tasks he will behave in a similar way to what an ftp daemon might ask him to do. Again, this means no need to create any new users.
The only other thing I had to do was create the /usr/share/empty directory which didn't exist on my machine. vsftpd needs this to run.
root> mkdir /usr/share/empty.
That was it. I had a few wild-goose chases (trying to define www-data as the user to run as in inetd.conf) but trying to connect from a PC generally gave fairly useful errors.
You said in your original query that after trying to login "nothing happens". Can I suggest you use the command line ftp command in DOS as it seems to provide more useful errors (which you can post back here if anything goes wrong). From a cmd window on a PC
C:> ftp your.mybook.ip.address
and it should prompt for a username and password. Just use your own.
do this internally on your home network. Once this is working you can then worry about port-forwarding and accessing from the outside world.
I hope this helps, sorry it's so long-winded.