Joomla FTP Layer is a feature introduced in Joomla 1.5 to resolve some permission problem experienced by many Linux/Unix host Users.

Some Hosting provider or Shared hosting servers or simply server may have a high security level that does not autorize to write files or create directories.

With Joomla 1.5 and FTP Layer, it is now possible to use FTP to create directories or simply write files.
To use the FTP Layer, some parameters must be specified such as the URL or IP address, the user name and the password.

The FTP Layer can be setup during the installation or changed in the Global Configuratoin (if you can write it).
If you have already installed Joomla and the FTP Layer is not enable and you can not modify it using the Global configuration, the only solution consists in updating the "configuration.php" file manually. (Probably using an FTP connection or telnet).