In the UNIXy (UNIX, BSD, Linux, OSX) world secure file transfers have been the norm for years, thanks in part to the standardization of SSH as the security protocol due to both its simplicity and power. Windows, on the other hand, has never featured security as a very important feature, evidenced by the ellaborate routes someone must take to handle SSL in IIS.
As a stop-gap measure many people have started to use the UNIX compatibility layer Cygwin, which is a wonderful system that lets you run and/or compile UNIX software on Windows. One of Cygwin's many available software packages is OpenSSH, the defacto standard SSH daemon in the UNIXy world, so by using Cygwin you can set up SSH for your Windows server. There's just one problem - it doesn't work well.
The problem with SSH, or indeed any UNIXy compatibility layer, on Windows is the age old problem that the traditional UNIXy file & directory security system is completely different to what Windows provides.
UNIX file security is based on setting the Read, Write and eXecute (thus RWX) status on any given file for both you (aka the User), anyone in your Group (or more specifically the file's assigned group) and the Other users on the computer (thus UGO). As an example, if your file is set to allow all three (UGO) to Read & Write to the file then anyone who has access to the machine can open & change the file. A common way to list these settings is in the form of octal values - Read is 4, Write is 2 and eXecute is 1, with the numbers added together for each user type, so the common setting of U=RWX,GO=RX becomes 755.
Windows file security is based on Access Control Lists (ACLs), which are basically lists of individual users and groups and their associated permissions. Rather than restricting you to only assigning permissions at three levels (UGO) you are completely open to decide what groups and users can do what to your files. This gives a great amount of flexibility as you can more easily mix 'n match security groups and group memberships. An example might be allowing both the Executive and IT groups could read a reports directory but only Accounting to modify files there.
As you can guess there's going to be issues trying to superimpose the UNIX UGO-style permissions on top of Windows' ACLs, and there are.
When you install Cygwin first it grabs a copy of the current users & groups settings from Active Directory (or your local computer, if you aren't in a domain) and saves them out as /etc/passwd and /etc/group in the standard UNIX format.
The first issue with this system is that every time the user groups and user accounts change you have to re-import the accounts settings. While, yes, you can create a cron event to automate this, the problem gets worse ...
The next issue is that it doesn't correctly handle the user's primary user group, mainly because Window's doesn't have such a thing, so instead it assigns all users to an invalid group. Now, on top of having to automate synchronizing with the Windows accounts system you have to work out how to put users into their proper groups so that their files are properly acessible.
There's another problem: when you log in through sftp any files uploaded have the file permissions set incorrectly. Thankfully there's a way of fixing this using a kludge to override the sftp defaults, but who likes kludges?
The problem gets worse with directories: all directories created are assigned the default usergroup listed, and coupled with the file permissions problem it leaves your directory structure so that only the original user can view files in the new directory. And no, there's no way to fix it using SFTP, you need to log in with a full shell session to run chown on the directory in question - not something you want your average non-technical designer doing on your production web server.
So, combine the four problems above and you end up with a really messy system that ultimate simply doesn't work cleanly.
It is for the above hassles that at work we've paid hard cash for Vandyke's VShell ssh server, which works wonderfully well by the way.
