out of the box install of 7.0 plus security update openssh-server-2.3.0p1- 4.i386.rpm results in sshd_config with the following lines # Uncomment if you want to enable sftp Subsystem sftp /usr/libexec/openssh/openssh/sftp-server ^^^^^^^^^^^^^^^ but s/be Subsystem sftp /usr/libexec/openssh/sftp-server ^^^^^^^^
Already fixed in Raw Hide. *** This bug has been marked as a duplicate of 21290 ***