To FIX this problem, follow the steps:

access: [url]http://fogserver/fog/management/[/url]
*** FOG Configuration ***
*** FOG Settings *** in the menu on the left
-> Replace the FOG_TFTP_FTP_PASSWORD fields under FOG settings

Then open the file:
/var/www/fog/commons/config.php - check the values of: TFTP_FTP_PASSWORD and STORAGE_FTP_PASSWORD
These MUST match the password you set above, if not write them properly in here
Finally reload of the service
/etc/init.d/vsftpd reload

then will need change the user fog password, by shell: eg.
fogserver:/# passwd fog
enter the new password
re-enter the new password
done