Comment #3 on issue 157 by [email protected]: gVim alters file type from Unix to DOS, with propert configuration directives in place.
http://code.google.com/p/vim/issues/detail?id=157

Since I didn't say previously, I used gvim 7.4a.35 to perform the test on a Scientific Linux system; gvim had no problem reading simple6.vimrc nor did it have any problem reading and writing the file via ftp.

So: may I suggest reading :help netrw-debug to get a trace of what's happening. You may send a copy to me (Chip Campbell) at [email protected] - NOSPAM. Please elide any passwords (unless you actually want me to have them :)).

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