Ubuntu Security :: Setting Up Keys For Ssh For Multiple Users?

Ubuntu 10.10 Server is loaded. Openssh has been loaded.

I have multiple users which need access to server via ssh.

My impression from reading about ssh is that a key needs generated for each person. Thus, each key will have a passphrase that is unique to them.

In /etc/ssh/sshd_config, the default sshd_config suggest using:

%h/.ssh/authorized_keys

My assumption is %h is a variable that will allow the current user to use the public key stored in his home directory under the .ssh folder in a file called authorized_keys. Is their a command string that automatically populates the authorized_keys file?

I am surprised that even though there are a number of hidden (e.g. .****) files located in the home folder, there is not one automatically generated as .ssh. It appears I have to create that directory myself. I am especially surprised by this since it appears the instructions for generating a key seems to load the key in the home directory instead of proceeding to create a .ssh folder to store the keys in.

It is not clear, but it appears that the public key needs to be copied or appended to the authorized_keys file, but, using the scheme above, the public key needs to be copied or appended to each users authorized_keys file instead of appending all public keys to a single authorized_keys location.

It then appears that each persons authorized_keys file needs permissions set to 600.

It also appears that if I decide to use RSA instead of DSA, I would do the same thing above but would use authorized_keys2 file instead.

Why doesn't the home folder which gets automatically set up for each user automatically get a .ssh folder generated? i.e Why does it have to be created by hand? Does it need the same permission on the .ssh folder? ie 600?

My aim is to allow many to log on via ssh simultaneously and then allow many to simultaneously vnc into their respective gnome desktops.