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Sql Server locations

Can I have Development and Production servers on the same machine. Also I am having Database backups on the same machine on different drive, is it Ok or do I need to move them to different machine.Ofcourse I am taking backup’s on tapes every week.
"He laughs best who laughs last"
I think, you can not have two editions (Development and Enterprise) in same Machine. But you can have multiple instances (1+16), one you can keep for developement purpose and another purpose. But we don’t keep anything related to development in the production server coz of performance issue. Secondly, backups, normaly we keep it seperate, in your case you are taking it in tapes, then the risk factor is less. If you have space in different machine, please move it to other machine, the reason is restoration from harddisk is faster from any external media like tapes. Why I prefer to move it to another machine, coz, you have the data which is attached with ur database in the database server, if any chance, its not accesible, always the data from other machine will be useful. -Johnson

When you say multiple instances, Do u mean that I can have 2 instances, one for Development purpose and the other for Production(real data) on the same machine. Thanks!
"He laughs best who laughs last"

yes, you can install one Default instance, and you have have 16 named instances in one machine, but it permits according to your resources like, momory and hdd. you install SQL default instance for your production database and the named instance for your development activities. Here you can apply the replication to get the latest data from the production database too. The replication will be faster coz its within the same system. -Johnson

sorry one correction
I have mentioned the number of instances as (1+16) total instances which a machine can have 16 its (1 default +15 named) -Johnson
As per you regarding replication with in same system, can you pls guide me how can I do tht or refer to BOL where I can read exactly what I need.FYI..I never worked on replication till now Thanks!
"He laughs best who laughs last"
On BOL under Search tab type ‘replication’ and you will get all the information you wanted. Satya SKJ
This posting is provided “AS IS” with no rights for the sake of knowledge sharing.
I would recommend seperate machines. A developer could create code on the dev instance that consume all your CPU/RAM/disk. etc that will affect your production instance if it was on the same machine. You could limit the CPUs (if you have multiple) per instance etc but still to risky if you have any kind of SLA on the production instance.