allowing users access to files not owned by them

I have cpanel and flash media server installed on server.
To allow users to stream they have to have an applications folder in their ftp dir.
Now for the stream to work that dir has to be owned by root. Well since its owned
by root they can't access the files is there a way to fix this issue?

 

there is not very good documentation but here is what I have done to test this.
put the application folder in /home/test/applications and the stream worked fine.
when I move the folder over to the public_html folder it doesn't work.

also in the flash media admin page when you change the owner of the applications
folder in public_html to user:user it disapears from the control panel as the system
doesn't see it.

i don't know if this is a solution cause the user would have to be able to upload files
to and be root:root on the files.