I can certainly vouch for this, but I was wondering if you know what may cause this issue to arise in the first place. Shouldn't we be able to install Orchard via the Web App Gallery in WebsitePanel anyway??? and Web Deploy is not supported
on their Shared Hosting Plans either. Grrrrrr!!! FTP install is the long way to do it, though doable. I've lodged a support ticket to hopefully resolve this issue.
And yes I think it is possible to do from VS2010 - FTP that is because if you're on the shared hosting plan which I think you maybe because you would have greater control otherwise i.e. being on a VPS or above, you cannot use the Web Deploy option.
Just going into Build -> Publish and then you can choose how you want to publish your site to it's destination.
WebMatrix is a good way to install it on your local, and publish it, very simple, or even if you want to open the application in VS2010 it has a Launch Visual Studio (Just be sure to select the files view) :)
Hope this helps... Still want to install Orchard through WebsitePanel though. :(