530 User cannot login. Login failed.

Be kind - I was put on a project to build a Windows 7 PC from scratch, knowing ZERO about it.  FTP Server is needed on this PC.  Following a page I found, these are the steps I followed:

Installing FTP Server via option on Windows 7:

1. Select “Programs”, then “Programs and Features” in the Control Panel.
2. Click “Turn Windows Features On Or Off”.
3. Expand the Internet Information Services node.
4. Expand the FTP Server node.
5. Check the box next to FTP Service.
6. Expand the Web Management Tools node.
7. Check the box next to IIS Management Console.
8. Click OK and wait for the service to be installed.

To avoid “FTP Error: 530 User cannot log in, home directory inaccessible”, need to set Read permissions to All Users. 

                Open IIS:             Start >
                                                All Programs >
                                                Administrative Tools >
                                                Internet Information Services Manager >

                Double click on Sites.

                Double click on Default FTP Site. (NOTE – if Default FTP Site is not there, add a Default FTP Site with “C:\” as the Default location and with “Default FTP Site” as the name)

                Double click on FTP Authorization Rules.

                Click on Add Allow Rule.

                Select the option All Users.

                Check the Read  box under Permissions.

                Click OK to submit the changes.

                You will then need to restart FTP Services by following the next steps:

                Click on                 Start >
                                                Administrative Tools >
                                                Services

                Select the service named Microsoft FTP Service.

                Click on Restart Link.  You should now be able to test FTP services.

Works great.  Then had to submit the PC for a PCI compliance scan and they told me the only problem was that I needed to load this security update for Windows in relation to FTP - KB2489256.  I downloaded and ran that patch and now am seeing the

"534 Policy Requires SSL"

error when I try to FTP in to this PC from any other PC using any of the 4 different users on the PC, including "Administrator".  Many of the programs/applications on this PC will require FTP in order to work, so what do I need to do to get rid of this error - without opening another security hole?

Thank you!

NOTE - I edited the title of this thread to reflect my most recent finding below.