If you're using the ssh connection yourself, you may not want to set a short timeout, or any timeout for that matter. Last time I had a timeout set in sshd I discovered it only looked at client in data to keep the connection alive. A long-running process on the server, even one that outputted to the terminal, would time out, drop the connection and kill the server process.
This was quite a few versions back, maybe f10 or f11'sh, and maybe that problem is gone now. I haven't set a timeout in sshd_config since.