your dedicated server should run your server executable, and store mysql data.

as i already said before my "core2duo 1.88 ghz 2gb ram" home pc with winodws xp was able to run Knight Online server with around 45 clients connected. all login server,game server,database was on this pc and i was also running the client same time.

these servers should handle 100s of players theorytically.

-just setting up a Knight Online server was a great pain, and it was really hard to something stable, writing the game and server your own would be more difficult, imo-