Database Server and SQL Setup Query

We currently have 3 seperate applications which have SQL databases, all  installed on one windows 2003 server. We now have a fourth system which also requires SQL Server. I would like some advice on what is the best way to setup databases in SQL.

Would it be best practice to install the application on a seperate server and just link the database back to the database server.

Then to tidy this up...
Move all applications onto a seperate server and keep this server as just a database server.

How many databases can SQL Server 2005 standard handle before you setup a second database server?

I would like to implement a strategy now and tidy this up...

Who is Participating?
Walter RitzelConnect With a Mentor Senior Software EngineerCommented:
From architectural perspective, app and database should reside in different servers.
Now, how many databases a server can support is a hard question to determine. You need to weight on memory, disk space, number of cpu cores just from hardware perspective. Then, from a database perspective, you need to weight how intense is the usage on each one of the database schemas, growth rate of each database... for example, databases that are mission critical usually have their own servers... apps that are not mission critical could share a server, using the points mentioned above to make the correct dimensioning.
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