For the hosted model, customer data is stored in a separate instance of a SQL 7.0 database. None of our customers' data is co-mingled.  Our licensed model will support usage of SQL 7.0 and SQL Server 2005 or later.
FuzeDigital houses all of our hosted servers with Internap (  Internap is SAS 70 level II certified and provides a completely controlled and redundant environment from the Fisher Plaza Building in Seattle, a building especially architected for fault tolerance and SAS 70 level II certified.  We have also architected our server environment to be fully redundant and scalable.