That is a known issue that was resolved in the following rollup hotfix: http://support.microsoft.com/kb/955136

I think the problem that you are seeing is due to the SSL settings, which are set to "Require SSL" by default. If you change your settings to "Allow SSL", then you can drop out of SSL. What's more, if you open the FTP SSL Settings feature and choose "Custom", then you...

Does FTP 7 RTM contain the FTPS command tool? The tool was mentioned in the video at http://channel9.msdn.com/shows/IIS+Show/An-Overview-of-FTP-7-with-Robert-McMurray/ (16'01")