I'm going to keep this one fairly short because there's just not a lot to say on the subject, but it needs to be said.
It's been one of my long-standing diatribes that consolidating DB servers doesn't get nearly enough thought by a lot of shops. Everyone always talks about performance, space, and licensing. And a few talk about downtime -- you know, like what happens when the server goes down and now you're stuck with all your apps on one box, so everybody's down.
But another aspect that doesn't get talked about much is upgrades. If you've got all your apps on a single box, then they all have to upgrade together. Currently I've got a server that was consolidated, and it houses the DBs for about 12 different apps. I've certified all the apps but one for a Katmai upgrade, and I can't upgrade because there's one app that's not only certified, it breaks when put on Katmai. Now, this isn't Microsoft's fault, it's just a fact. So now because of the consolidation (that I had no input into), I have to keep all these apps on SQL2K or try to find a way to get them to separate the box back out again.
So if hardware is your reason for consolidating, then you might want to consider going to virtual route. You get to consolidate the hardware and still keep all your DB instances separate. Of course, you can also install separate instances, but that has its limits and problems too.
Anyway, I didn't want to make this a huge lecture on all of these technologies, I just wanted to remind everyone to take upgrades into consideration when deciding whether to consolidate. I've also seen it happen with patches. A patch is needed for an app that's having problems, but it ends up breaking another app on the box. Now what do you do?