Have you tried it since? I've noticed when FTPing using WS_FTP to 1&1 if I close the connection and try to reconnect quickly it often fails. Seems to like a break between connection attempts to sort itself out.
You could always try FTPing from DOS and see if that works:
Start - Run - CMD
click here (if thats the right spelling of the domain?)
you will then be asked for your username and password.
see what happens that way.