The directions from this previous hint weren't cutting it anymore for setting up a chrooted SFTP environment in Tiger, as the networking code changed significantly from Panther.

With these updated directions, you can use ssh and secure FTP (sftp) with chroot to enable a 10.4 machine with truly secure file transfer. These instructions result in a connection that both encrypts the session and has it set so that sftp users won't have free run of the whole file system -- they will be jailed in a location you specify. I've tested this on a couple machines running OS X 10.4.2, and it appears to work without breaking anything; I've also patched one of the machines to 10.4.3, and all seems fine so far.

You will need to have the Developer Tools (Xcode) installed on your system for this to work. These directions work on Tiger client; I have no resources to test them on Tiger Server.