Read the following article to get how update stats works...

http://support.microsoft.com/kb/195565

Looks like it is possible.. see the following thread replied by Hilary who is one of the sql server MVP AND coauthor of one of the replication books...

http://groups.google.com/group/microsoft.public.sqlserver.replication/browse_thread/thread/9a35d82c1bf7509b/e35653fa4546b5f4?lnk=st&q=replication+from+sql+server+to+mysql&rnum=5#e35653fa4546b5f4

http://groups.google.com/group/microsoft.public.sqlserver.replication/browse_thread/thread/1aac4ac36a94cc95/55eec14ec5ea02ea?lnk=st&q=replication+from+sql+server+to+mysql&rnum=3#55eec14ec5ea02ea

Truncate is minimally logged operation and it will not break LSN...

That is correct as long you give the access to the db through application but I have seen the cases sometimes clients want to generate custom reports which requires db...

Are you doing local backup or network backups?

Check for disk error and disk queuing during backups operation...

If your backup is network backup then check Network adaptor for any errors or configuration...

When you have 16 GB memory do not use /3gb...MS recommends not use /3gb if you have 16+ memory...but some gurus advise not to use /3gb when you have 12+...

What is the execution time difference?

Bookmark lookups are not always bad...

There is no command to get this other than DBCC showfilestats ...

Use DBCC showfilestats to get the total  and used extents for a database and then calculate the space.

Security might be another concern... when you have one db for all clients ... what happens if one client deleted another client's data?

In this case you may endup with...

I think MS follows some algorithm to determine the virtual log size based on the tlog size...and you can't change the size of it..

Read the following articles for details...

http://msdn2.microsoft.com/en-us/library/aa933049(SQL.80).aspx

Install IIS and retry...

If it is already install, just uninstall and reinstall ISS AND install RS.

Is snapshot isolation level or mirroring is enabled?

Keep in mind the performane and security issues with dynamic sql...

The Curse and Blessings of Dynamic SQL

http://www.sommarskog.se/dynamic_sql.html

Check http://www.sqlis.com ?

I never been in this situation but I will go with multiple dbs to reduce the down time and management can handled through scripts....