I'm looking for an FTP solution that will allow me to:

  1. Setup a group that has R/W access to 2 folders in the file system (/var/www/1 and /var/www/2)
  2. Create users that inherit the rules from that group
  3. Be able to see what users are logged in and view a history of what transactions have happened

Is there anything out there like this? Can you provide or reference detailed instructions on how to do this? The only thing that I have seen that allows me to do this is Serv-U FTP for Windows (it's super expensive).

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I believe THIS: http://www.pureftpd.org/project/pure-ftpd can help you with the FTP server, but I'm not sure about group permissions. Can you run a virtual server with simple windows XP on it and use FileZilla server? If not, try this other option: http://en.wikipedia.org/wiki/CrushFTP_Server I think that has groups too.

EDIT: FileZilla for windows (server version) DOES allow groups and inheritence. Also custom read/write and download/up speeds for groups or users individually. Here's a screenshot of the group config page: http://www.u4ik.us/public/fz-win.rtf (it's an RTF document with screenshots).

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