The ftp server in the sharing pref is only for ftp, not sftp. As I recall, sftp runs via the sshd. So to get sftp running, you need to start remote login (aka sshd). But as I recall, I had problems connecting to my mac via sftp (not sure what exactly), so no guaranteed results on that.
In a lab environment, normal ftp should be fine. The main problem is that it transmits the password in plaintext, which anyone can then sniff. I doubt you'll have such a problem in a closed lab.