Permission to create new users but not to manage them
Don't forget to also give those same users the permission to access administration pages -- otherwise they'll be denied anytime they try to access any URI beginning with admin.

Also, I don't think it's necessary (or even desirable) to unset the menu items like that... You should just be able to do this:

function fm_users_more_menu_alter(&amp;$items) {    
  $items['admin/people/create']['access callback'] = 'fmu_add_user_access_callback';
  $items['admin/people/create']['access arguments'] = array(1);
}


Finally, remember to rebuild the menus after making such a change.