I'm not sure what the reason is (whether shared IP or not, this is something you have speculated), but it seems to be very common that store owners cannot use the FTP functions.

In fact, way back when someone first brought this forward, I took a very general FTP script off the net and uploaded it to one store's website, executed it, and had the exact same error return. So, don't think that I haven't tested this. It works 100% on 95% of stores with a handful of others unable to use it.

Out of curosity, who do you use for hosting? Maybe we can find a pattern.