I believe your problem stems from the cwd directive... cwd should be set to the home directory of the user xxxx (or whatever)... by setting it to /, what the protocol is doing is logging in and changing directory to / and then trying to create the path that you give. My 2 cents :-)
Update: please remember that you won't be able to ftp in as the user: root :-) (so you cannot technically go to the folder /)