Ooh, Dan Blake's CRM Architecture and Business Blog has an excellent post on multi-tenancy. Look that up in your Funk and Wagnalls. Dan was answering a question on the CRM Team Blog post Multi-tenancy in CRM 4.
"There seems to be some confusion around how to configure and use multitenancy in Microsoft Dynamics CRM 4.0. In simple terms, multitenancy means that more than one “tenant” shares a single implementation of a web application. A tenant might be a single customer to a vendor that hosts the software for many customers. Or, it might be a division or department in a large organization. The big benefit of multitenancy is economy of scale. You can install all of the software on a set of servers and serve several customers with one implementation."
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