Again, thanks for the feedback. Here's my current thoughts on things, based on what people have said.
I do plan to build a new server, and in the process rebuild the software end of things. I will likely use Xen or some other virtualization system to isolate components better.
I will likely be narrowing down the services that run on the machine. Mainly this means FTP will probably go away, as it's the easiest to hack. If someone's sitting on the same subnet as you, they can easily snoop packets, and FTP passwords are just plain text. If I do that, I will probably have to stop other plain-text services as well, and require SSL for email connections.
MySQL, while useful... is a royal headache to administer. My previous plans have been to drop it entirely, but seeing as a lot of you use it, (and a lot of software doesn't support SQLite yet) I don't know... Maybe I can find an easier way to integrate it with everything else.
With the possible exception of FTP going away, I don't think I'll need to do anything that alters the way people use services here. That is, despite the increased security, there shouldn't be any more difficulty for the end user.
Revenue: If I did the game server thing, I'd likely do a seperate machine. At the very least, it would be a seperate virtual machine, so it wouldn't bog down regular use here. As was pointed out, there are people that rent a single game server for 30-50 bucks a month. I could probably run four of those on a dedicated piece of hardware, and it would cover the cost for both itself and xepher.net. The commercial hosting... was mainly just an idea. As was mentioned, it seems counter to the main ideas here. I'll probably just continue what I've done in the past. That is, people (usually friends or people I know) have approached me to host commercial ideas. I usually think of it as "sponsorship" and give them space for a percent of their profits. To date, none of them have actually turned a profit. :-) But either way, know that commercial hosting would be entirely seperate from the free hosting here. If someone's paying me for a site, it's not gonna be in any of the same lists of users, the newsbox, or anything like that. In fact, I think you'd be hard pressed to know it exists. There are actually about 4 commercial sites here right now. None are really active, and most are failed ventures of friends of mine, but my point is that if I ever did do commercial service, I wouldn't let it interfere at all with how things run now.
As for applications... I think ya'll are right. I can't force people to do it, or they'd do it wrong. What I think I'll probably do is semi-automate things. I'll probably take it off the regular forums, and write some custom stuff for it. That way there will at least be a form to fill out, so people don't get screwed up by not putting the right info down. Originally I wanted that to happen, because when things were small, seeing people overlook directions was a good indicator that they weren't really paying much attention. Nowdays though... well, it's big enough that I find myself judging more on content alone, rather than personality and the dozens of other little details I used to. I just don't have time to really get to know everyone before deciding. As such, a form-based application is the way to go. I'll provide an area for basic info (username, site name, etc.) a box for a description of the _idea_ and another for the general "let me in because..." stuff. I'd also give an option for uploading a few images along with the application, so people don't have to go make cheap websites elsewhere to show off their stuff. I'll probably also integrate a voting box, and I'll probably deputize a few volunteers to tend things and answer the easy questions, point out obvious problems, etc. That would help me by weeding down things a bit. That way, when I get three or four deputys telling me "let this one in" I can be pretty confident that it's a good one to go for. I'll probably also draw up some written guidelines for what I look for in applications, so everyone can be on the same page when judging.
Think that's it for now... I'll add to things here as I work them out in my head. As always, ideas or comments are welcome.
