File Transfer Protocol is useful for transferring files between two machines, typically between your home machine and a file server (where a web site is hosted). it can be used to transmit files directly between two home computers but that, as well as hosting a website on your home machine, is dependant on at least one - perhaps several - things:
your computer must be able to be located via a nameserver. this means your computer has to have a publically accessable IP address which people will access directly by punching in the numbers (ex. 68.169.30.2) or a domain name attached to that number (ex. www.lfdriscoll.com) which is a shortcut to that number. after people have accessed your computer via this address, you can direct them to a folder with your website.
the major disadvantage of this is that you have to open the gates, allowing anyone on the internet access to the HARDDRIVE OF YOUR COMPUTER. they will connect on a variety of ports and it poses major security problems. there is a lot of different software out there which will allow you to make your computer a 'host' machine and thus direct traffic to certain locations on your computer but this is still a security risk unless you really know what you are doing.
that is why most websites are on a host server you subscribe to - these people have servers to handle the people connecting to their computers, the security to protect their computers, and backups to protect their data.
bandwidth is the other major issue.. as people connect to your computer, they connect through the same thing you use to connect to the internet. if that is a dialup, people will be connecting to your computer at a max of.. oh, 40kpbs... if you are brwosing online, they get even less. if more than one person connects at once.. well, you get the idea.
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i hope that helps, if i was wrong about anything or if it needs more elaboration, somoene please back me up