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I deleted my .ssh folder, changed my root password, then logged back into my account (mediatemple).

Now I did used the nano command to create the .ssh folder, and inside it the authorized_keys file that will store my public key.

is this correct so far?

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nano is a file editor. You can make directories using the mkdir command. – Dennis Williamson Nov 26 '09 at 13:16

Well, the permissions need to be set correctly if you want authorized_keys to work.

I usually generate a set of keys and have it done automatically. :)

ssh-keygen -t dsa

fyi; the correct rights are like this:

700 on the .ssh directory
600 on the authorized_keys file.

Owner is the user.

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yes - sounds ok to me

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