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It is a less secure method than an isolated/DMZ-zone based web server, because an anonymous web user is accessing your internal network share. How secure/insecure will depend on how secure IIS + app are, and how securely-configured your internal network is. HTH.
[edited by: Bolad at 4:08 pm (utc) on Oct. 3, 2007]
For typical Moodle stuff keep it all one one domain, nice and simple. The security is much better if its controlled by AD. If you have remote access to the Moddle server you will need remote access to the Moodle data. Why would you give someone access to moodle and not the data? It makes no sense. Unlews you are hostng moodle on a shared server? bad idea, Moddle eats bandwith big time.
Are you UK based, if you sticky me I can put you in touch with Moddle consultants who can sort it for you.