The person must have lived with you all year if they are not related to you or have lived with you for more than 6 months of the tax year if they are related.
They must not be providing more than 50% of their own total support if they are a Qualified Relative. You must have paid more than 50% of their total support if they are not a Qualified Relative.
They must have income of less than the exemption amount (3200 for 2006) if they are not your Qualified Child who also meets the residency test.
They must not be a dependent for another person.
Usually inmates have more than 50% of their total support provided by the government operating the penal institute even if you do provide some personal support.