sshd_config:
Subsystem sftp internal-sftp

Match group clients
        ChrootDirectory /var/chroot-home/%u
        X11Forwarding no
        AllowTcpForwarding no
        ForceCommand internal-sftp


/etc/passwd:
david:x:1000:1001::/var/chroot-home/david:/bin/sh


Directory Structure

ls -al /var/chroot-home/david/
total 4
drwxr-xr-x 5 root        clients  58 2011-02-20 23:09 .
drwxr-xr-x 3 root        root     24 2011-02-17 09:32 ..
drwxr-xr-x 2 david clients  33 2011-02-18 22:34 .cache
drwxr-xr-x 3 david clients  16 2011-02-20 23:09 files
-rwxr-xr-x 1 david clients 142 2011-02-17 09:31 .htaccess
drwxr-xr-x 2 david clients  28 2011-02-18 23:21 .ssh



 ssh:

ebug1: ssh_rsa_verify: signature correct
debug1: SSH2_MSG_NEWKEYS sent
debug1: expecting SSH2_MSG_NEWKEYS
debug1: SSH2_MSG_NEWKEYS received
debug1: Roaming not allowed by server
debug1: SSH2_MSG_SERVICE_REQUEST sent
debug1: SSH2_MSG_SERVICE_ACCEPT received
debug1: Authentications that can continue: publickey,password
debug1: Next authentication method: publickey
debug1: Offering public key: /home/david/.ssh/keys/id_rsa
debug1: Server accepts key: pkalg ssh-rsa blen 277
debug1: read PEM private key done: type RSA
debug1: Authentication succeeded (publickey).
debug1: channel 0: new [client-session]
debug1: Requesting no-more-sessions@openssh.com
debug1: Entering interactive session.
debug1: Requesting X11 forwarding with authentication spoofing.
debug1: Sending environment.
debug1: Sending env LANG = en_US.UTF-8
debug1: Sending env LC_ALL = en_US.UTF-8
debug1: Sending env LC_CTYPE = C