The following is what my /etc/sshd_config file looks like. Yours should look the same or similar:

# This is the ssh server system wide configuration file.

Port 22
ListenAddress 0.0.0.0
HostKey /etc/ssh_host_key
RandomSeed /etc/ssh_random_seed
ServerKeyBits 768
LoginGraceTime 600
KeyRegenerationInterval 3600
PermitRootLogin yes
IgnoreRhosts yes
StrictModes yes
QuietMode no
FascistLogging yes
CheckMail no
IdleTimeout 3d
X11Forwarding no
PrintMotd no
KeepAlive yes
SyslogFacility DAEMON
RhostsAuthentication no
RhostsRSAAuthentication no
RSAAuthentication yes
PasswordAuthentication no
PermitEmptyPasswords no
UseLogin no

The important points to note are that password authentication is disabled as are all of the “R” services. I have also turned off mail checking and the message of the day as they can confuse pppd on the client side. I still allow root login, but as this can only be done with a key, it is adequately safe.