What are recommended SSH key settings?

Solution 1:

Don't use 1024 RSA key. Use 2048 or 4096. RSA use only for authentication. Data encrypted with symmetric algorithm(AES, Blowfish, 3DES) with other key. There are no performance differences between 1024 and 2048 key.

Should I make sure my SSH key is 1.0 compatible

Generate RSA keys. You can use the RSA keys for SSH protocol 1 and 2 versions. DSA keys for use only SSH protocol version 2.

Solution 2:

I'll just second ooshro on the cryptography (RSA is used only for key exchange and therefore cheap, I recommend RSA-2048 or above). After that, the encryption ciphers are quite cheap on modern hardware.

On the protocol: just avoid SSH-1, which has some weaknesses.

Solution 3:

I'll third ooshro and recommend setting a password for the private key as well. It's really not much of a hassle to enter a password for it on the order of once per day, and if your private key is compromised, not all is lost.