I don't normally drift outside of the coding skillset, but this one has irked me for a long time, and I know other's are feeling the pain.
If you've been using Eclipse's remote systems plugin for a while now, to connect via FTP to a remote server, you probably don't have this issue.
But, if you recently purchased a new PC and decided to get the latest and greatest updates for all your software, you might have run into this problem.
So, you downloaded Eclipse, Java Runtime, the Remote Systems plugin, have no issues connecting via SSH, you're as happy as can be. Until you try an FTP connection, and get a file system error.
Who's to blame? You might be suprised to learn that Java SDK 7.0+ actually has some kind of FTP related bug. I won't pretend to know the details. But, uninstall 7.0, then download and install Java SE version 6.0 (latest update) of the development kit, and all of a sudden things work!