Data Segregation Thoughts?

[Rob Wiltbank]

In preparing to update MySQL from 3.28 to 5.x, we're also looking at rewriting a good majority of our web applications to optimize our queries and code for MySQL, in addition to looking to enhance security of our data. Previously, web application data was housed on a single server as some of the data is shared between applications.

However, we were considering segregating all of our user data to a separate physical server because we have very sensitive information contained within those tables and, for the applications that do require some of that data shared, we'd go so far as to duplicate the less-sensitive data on a 'demographic' table on the general web application database server.

So, my question is this... Is this really the best scenario? I know we can simply specify a different user account with which to connect and access the user data we need through row-level security, but I guess I'm just trying to solicit any broad thoughts or suggestions from other people in the same situation.