guess what. I reinstalled the server all from scratch.
created a new site, made a db and an ftp user for it.
all connected fine except ftp user.
so I restarted computer.
same result as above but with web1 this time.
it was working perfect. go NO IDEA what went wrong with it....
edit: I am following this step by step and doing it all perfect:
the exact msg I get on terminal after apache restart is this:
* Restarting web server apache2
Warning: DocumentRoot [/var/www/example.bounceme.net/web] does not exist
apache2: bad user name web1