I've been researching this question for several days. I have several small sites that I am building that will support products that will be for sale next year. They are static HTML sites and won't get a great deal of traffic (the products are niche). The sites will not have duplicate content, but a few of them are related and I would like to cross-link between them, and link to a long term business site (kind of the "mother" site). The business site (hosted with Pair by the way- which I think rocks) is lucrative, and ranks on page 1 in both google and yahoo for my keywords.
I would like to use a single host with a multiple domain option for the new sites. It would streamline maintenance of the sites BUT, I am concerned about triggering a search engine penalty for crosslinking. I certainly do not want to jepordize the business site. I find the optimizers are mixed in opinion about this.
I found one host, ix webhosting, which does a multiple domain hosting with unique IP addresses, which may solve the problem; ix does not have very good reviews.
I don't want to spend a ton of $$. These sites won't be generating income for at least a year. I just want to get them up and running and start working on content and inbound links. I don't need a bunch of bandwith or storage or handholding. I want good uptime.

Any suggestions?
1) is the penalty for real
2) if so, any reputable multiple domain hosts with unique IPS
3) if so, alternatively, a host the specializes in small sites for not much $$
4) if not for real, a recommended multiple domain host (i was going with site5 or hostgator before I though up the potential penalty problem)

Thanks!

The search engines are smart and getting smarter, it's not about IP's or such, it's about duplicate content. Those nosy little robots can figure out duplicate content especially if it's cross linked. So make the sites individual even if they are basically about the same thing (not carbon copies under different names and/or IP's). Some search engines don't care much, others look at cross-linking duplicates as "cramming" and they will either penalize or just not list you.

I don't see any reason why you would be penalized for this.

If everything is above board, content is ok, relavent linkage (ie dont cross link in any dodgy way (whatever that would be, who knows) to attempt to get better PR)
then I cant see any problems.

As stated earlier, duplicate content is a no-no, and if domains are on the same host/ip then obviously its easier for the search engines to know who you own those sites, but there is no reason for them to apply a penalty just because you have them like this.

Unless you are doing something fishy, in which case, you risk penalisation no matter how you host the sites, except of course its easier to get caught when all in one place.

The search engines are smart and getting smarter, it's not about IP's or such, it's about duplicate content.

Thats hit the nail on the head :) I really cant see that having multiple domains on the same hosting account would cause problems. If you think about it thats really what all hosts do for their clients, which doesnt mean we get penalised does it!

If however you have 2 or more domains with duplicate content the search engines (especially google) will pick up on this and will more than likely get the domain(s) banned/sand boxed!