Here are my own steps to setting up cygwin and the sshd service for Windows 2000.
Openssh is a great tool, and the cygwin port works like a charm once you have it running. If I had known the info in step 7, installatio0n would have been quite painless.
1. Download cygwin from http://cygwin.com/
. Run the setup program and select the packages you want. The simplest thing to do is to get the default packages that are selected for you by the installer, plus "cygrunsrv" from the admin category and "openssh" from the net category. I found installing cygwin to be the easiest part of the process, and if you get stuck there's lot's of great help out there...
2. Edit C:cygwincygwin.bat. Make sure it contains the following setting for the CYGWIN environmental variable:
set CYGWIN=binmode tty ntsec
2. Start a cygwin bash shell. If cygwin installed correctly, you should be able to find it in start->programs->cygwin.
3. Make sure cygrunsrv is installed by typing "cygrunsrv -S sshd". This is the command that will start the sshd server, but that's not installed yet. If you get an error from cygrunsrv like "service does not exist" then you're on the right track. If you get "command cygrunsrv not found"
then go back over your install and make sure you get cygrunsrv.
4. Again from the bash shell, run ssh-host-config. Answer yes to the key generation questions. I found it easier not to use privilege separation. Answer yes to install as a service.
5. Start sshd with "cygrunsrv -S sshd" ("cygrunsrv -E sshd" shuts it down). At this point you should also have "Cygwin sshd" available as a service that you can start and stop from start->control panel->administrative tools->computer management - go to the services and applications->services list.
6. If all that went well, you should be able to ssh to the server("ssh localhost -l loginName"). At this point only user accounts that existed before your cygwin install and had administrator access will work. This and the next step were the biggest gotchas for me in this whole game.
7. To enable a user to log in via ssh: You should know that sshd looks for information in the comments field of /etc/passwd and coordinates it with NT permissions. This was mentioned but not explained in the howtos I read.
Here's how make it work: First, create the NT user and make them part of the administrators group.
Next, use the mkpasswd command to format a special passwd entry for that user. You can look at the output with the command "mkpasswd -l". Then either cut and paste the info you need into your /etc/passwd file, or use the command "mkpasswd -l > /etc/passwd".
This second will overwrite your existing passwd file. No matter what you do, make a copy of /etc/passwd before making any changes.
Create home directories for your users with the following commands:
"chown userLogin /home/userLogin"
Sshd only reads /etc/passwd once when it starts, so stop and start the server after you make changes to /etc/passwd.
I take it the mkgroup command does the same thing for /etc/group as mkpasswd does for /etc/passwd; I never needed to use it.
Another howto (link died jcj 04/15/2008)
About the NT and cygwin security