Hi,
To answer your question, I would look to make sure I am looking at the
newest stuff on Technet and MSDN as a lot of documents are best
practices for a particular version of software.
In general you would separate the database and web application as both a
security and performance concern, so it would depend on the needs of
your organization. If you expect a lot of traffic or need to make sure
that the compromise of the IIS server does not compromise the DB, then a
dedicated database server would be the way to go.
-- Mike Burr