Hi Casey,
good topics for the User Group to be sure. Definitly remind me on Thursday, there are a few nuances I'd typically cover which may apply to your situation.
The short answer though is;
>> give each client a separate data folder, or put all the data in a single SQL database.
actually I'd use a 3rd option - use SQL, but give each user a separate "database" (ie 1 SQL install, multiple databases.) One server can speak to multiple databases - this is a fairly common NetTalk setup.
>> On a related but different topic, issues and recommendations on out sourcing server and possibly database administration. A hosted solution requires 24/7 support.
I'm not sure that hosted _does_ imply 24x7 support. We host a few sites but basically we're only here when we're here. To provide 24x7 support would mean at least 4 people (168 hours in the week - typical work week for 1 person is 40 hours) and of course that includes night time, weekend time and so on.
If the client really does want 24x7 support then I guess you'll need to budget accordingly. In practice pretty much everyone I've come across only really needs "office hours" support. (Which granted, in your case might be from say 8am Eastern to 6pm pacific.)
As far as servers go, we've hosted on Rackspace and been very happy with the support there (and when I contacted them it was usually at night their time.) We've moved to Amazon recently (it's cheaper) but I haven't had need of their support staff yet.
cheers
Bruce