If I am building a CRM web application to sell as a membership service, what is the best method to design and deploy the database?
Do I have 1 database that houses 100s of records per table or deploy multiple databases for different clients?
Is it really an issue to use a single database since I believe sites like Flickr use them?
Multiple clients is called "multi-tenant". See for example this article "Multi-Tenant Data Architecture" from Microsoft.