I must admit I haven't bothered changing my root password though - the chance of someone connecting to my device with malicious intent is so extremely remote (but still possible).
scp works for me but sftp does not. SFTP wireless is clearly the way to go. How can it be fixed? Is dropbear or openssh letting you sftp? Why did they exclude it?
sftp client and server is installed with OpenSSH on the N800. Dropbear is a cutdown version of open ssh designed for limited memory devices and probably omits certain functionality such as sftp.
Given the spec of the N800, OpenSSH is a better choice than Dropbear IMHO.