We are using Windows 2003 Server Enterprise SP1 and IIS6 for our web server.
I've meant, what is your SSH/SFTP server? AFAIK, Windows/IIS does not support SSH/SFTP.
Oh, but it does, with this software: http://sshwindows.sourceforge.net/
This software works well, I've got about 10 users updating a webserver with only one problem: default permissions on new files. I have the "Set Permissions" option unchecked as you suggest, but new files that are uploaded do not inherit the ntfs permissions from the directory that it's been uploaded to.
Newly uploaded files are editable only by the owner, and readable by everyone. This becomes a problem when another member of the group needs to edit the file. This may be a responsibility of the ssh server software, I don't know. Maybe umask would help this problem, but since this is a win2003 server, I don't think it applies.
I must run a scheduled script nightly which corrects permissions on these files, but that is more of a work-around than a solution.
I'd really appreciate some advice if you have any (other than switching to a unix-ish server :) ) If anyone else uses the windows ssh server software, I'd really like to now how you handle this behavior.