Hey, I have a co-located linux box (redhat 6.1) and I need to host some small sites. How can I limit a FTP account to a specific directory (and dirs within)? My site is on that box and there is thousands of hours of code there that needs to stay private.

What FTP program are you running? If you are running ProFTPD, insert this into your proftpd.conf file:

<Global)
DefaultRoot ~
</Global)

Replace the two ending parenthesis with closing signs (>). That should do the trick if you are using ProFTPD.