If i host multiple domains or websites on one server by creating different folders for each, can Google penalize the sites for that? Thanks
No Google won't penalize you for that.. Google penalization is with only to backlinks for a particular site..
I have done this without any problems at all. I have 2 separate websites in 2 separate niches ranking on page 1 using the same hosting.
I am running 5 websites on one server. One has a PR3, another has PR1 and I am not sure about the other two. But there has been no issues with it and my hosting offers me the option to have Private IP Addresses; I have not used them yet. My websites are: Corporate Internet Solutions and CIS Directory These are two of my sites ^^^^. ~ Mike