SOLUTION:
O.K. For my problem I'm going to be performing the ftp from Windows to my uClinux nios. There is still ONE issue Linux to nios2 and that is an "ls" does not work. I did see a thread about this, but I didn't try it: The thread is titled "uClinux FTP Question?"
in the nios2-linux/uclinux-dist/vendors/altera/nios2 directory i modified the "passwd" file to point to my directory, not the "/home/ftp"
root::0:0:root:/:/bin/sh
ftp:x:14:50:ftp user:/cf:# ###ftp:x:14:50:ftp user:/home/ftp:
I have tested this from a Windows XP machine and it works. I can ftp, do an "ls" and see all the files, and "get" them.
I will test Windows 7 tomorrow... If I don't post again then there were no problems. I may try a Vista machine too, but I think the ftp client is not on the Vista so we'd have to install that and it's not my computer.
Hope this is useful to someone. I've done lots with the Compact Flash the nios and uClinux and it makes a reliable, inexpensive embedded data recorder.