It is always better not to allow direct root login through ssh. As there would not be any evidence left in log files regarding logged in user, unlike normal user login and switching to root.
But As you say PermitRootlogin is set to yes. You should be able to login as root.
Make sure if root user is listed in /etc/hosts.deny file as ssh honours this file, if ssh package is compiled with TCP Wrappers support.
Last edited by vinaytp; 03-28-2010 at 03:03 PM.