I've installed OPENSSH on a Windows 2003 server and have been able to login to SFTP server home directory. Right now my remaining problem is that when you login to the home directory you can see subdirectories within C:\Program FIles\OpenSSH.
What i did was mostly based on information from http://www.digitalmediaminute.com/article/1487/setting-up-a-sftp-server-on-windows
1) created user and group for SFTP
2) Installed OPENSSH
3) Ran mkgroup and mkpasswd commands
4) Changed the home directory to be C:\FTPGROUP based on information found http://www.experts-exchange.com/OS/Microsoft_Operating_Systems/Server/2003_Server/Q_21802084.html?sfQueryTermInfo=1+10+30+chang+directori+home+openssh+server+window#a16388948
5) Started OPENSSH service
I've set NTFS security to prevent navigating up the home directory and have tested but when i'm in the home directory i also see the subdirectories under c:\program files\openssh
I tried locking down that directory but connection fails.