What kind of server do you people see in real projects?
1) Web Services MUST be stateless: Basically you must send username/password with every request, every reques
Highly dependent on whether the service is single transaction oriented (say getting stock quotes) or if the output from the service is dependent on a data provided from a particular client across multiple transactions(in that case state must be maintained.)
As far as scalability issues, storing state in a database isn't actually a bad way to go (in fact it's probably the only way to go if you're load balancing your service across a server farm.)