First off, there really is no "resident" part of VSS. There is no server component to VSS. There is just a file tree that serves as the database that the VSS client (vss explorer or the IDE integrated tools) talks to.
I'm not clear on your second point.
I would highly recommend looking at Microsoft's "Team Development with Visual Studio .NET and Visual SourceSafe" patterns and practices white paper.
http://msdn.microsoft.com/library/en...ml/tdlg_rm.asp
I have implemented many of the recommendations at 2 organizations and it has seemed to work out well so far.
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Peter