Hi Dirk,
Yes, very well. Good to see you again. Michael, you have you hands full keeping up with Dirk. 
In looking at the discussion I think it will ultimately depend on Heather's situation at her instititution. With stronger linkages to external authentication systems (LDAP, Kerberos, etc), the issue of supporting student/faculty with login IDs and passwords is much less than we used to experience with earlier multiple installations of other CMSs.
At least one advantage of a distributed Moodle system is if one system goes down or connectivity is lost to one system, one doesn't lose everything as currently found in a single installation.
Cheers,
Bob