If a user wants to download the entire contents of a /pub/stuff directory, the user can use her FTP client to say "get /pub/stuff.tar". NcFTPd looks for that special case, and when the user does that it sends a TAR file of /pub/stuff down the data connection.
This feature is off by default because it degrades performance of your machine, especially if it is used a lot. It also causes more network bandwidth to be used because users can easily grab large amounts of data.
If you want this, set the tar variable appropriately. The gzip option is here because if you turn that on you can let them say "get /pub/stuff.tar.gz" to create a gzipped TAR file.
Examples: