Does anyone with a dedicated server host their own DNS Server? Or do you just use the HostMySite DNS servers?

We have a mix. Some like using ours because BIND can be a bit of a resource hog. Some run their own. I believe the majority (from what I've seen) use ours though.

from my experience:
- ca 90% use HMS's

of the remaining 10%, practically all use the one managed by their control panel (plesk or cpanel), and the remaining <1% did so by hand (I ran into 2 clients that ran their own dns servers without a control panel).

the biggest problem I see is people putting 2+ nameservers on the same box, which is a big no-no.

Bind can actually be very resource friendly. On a small VPS, there's an initial hit that you might not have room for, and hence it makes sense to use it elsewhere, but it scales well, particularly for small # of sites/high traffic sites. I've setup nameservers handling 500k lookups per day on incredibly small boxes.

We need more domain flexability. I really wish HostMySite gave dedicated server customers more flexablity in their DNS management. Like why we are not allowed to delete our primary A record is beyond me. I assume its to protect against "accidental deletes" for novice users, but there should be some type of advanced DNS administration where we can manage other types of records such as TXT and SOA.

Also, some type of bulk administration would be nice. I cant harp enough how I hate going through each domain one by one to add the same exact record. I know support would be able to do it, but that's not the point. It would be nice to have the ability.

We were actually looking into Nettica. But I haven't heard much either way about them. I really don't want to move my DNS away from HMS but the lack of flexibility/administrtion is killing us.

We have a VPS that we don't use anymore, (CF VPS+), and I would run the name server on there, but why is the 2+ name servers on one box a problem?

Because having more than one nameserver defeats the purpose of having multiples... redundancy.

single point of failure.

If you want to run your own, what I'd recommend doing is getting 2-3 cheap VPS's in geographically diverse areas, and replicating them out to those. you can setup BIND or djbdns and run a ton of queries through them with very low resources. I've seen 128 mb VPS's used in this role fine, and you can get them for $10/month.

It's much more important to replicate that out to multiple different locations than it is to have one monster box sitting at 95% cpu idle.