> The command that should be executed on the remote host 
> (usr/libexec/openssh/sftp-server) does not exist.

Find sftp-server and copy it to the right position. If it doesn't exist
anywhere, then perhaps your platform doesn't support it:

[./configure]
if test ! -z "$NO_SFTP"; then
        echo "sftp-server will be disabled.  Your compiler does not support"
        echo "64bit integers."
        echo ""

Or perhaps the rpm package you are using forgot to include it
(try 'rpm -ql <packagename>')

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