While there is nothing wrong per se with having password authentication in an ssh connection, for automated connections you will want to have a keypair generated and distributed. Something like the instructions found at http://sial.org/howto/openssh/publickey-auth/
Note that simply having the keys for your user ID does NOT preclude password authentication; to do so, you will have to configure your ssh daemon to disallow password authentication (or allow keyed authentication only; I forget how OpenSSH does it, it’s been so long since I’ve had to set it up from scratch).
On a related note, you will probably want to disallow root to log in via ssh; this is a configurable option in OpenSSH’s config file. Also, you should disallow telnet and plain ftp connections, if you’re looking to lock down your box.