Here’s a good document on Microsoft TechNet that discusses service account planning in MOSS 2007. The article is full of nice tips, such as “do not use the same account that is used to run Setup to perform administration tasks.” Here’s some info on SQL authentication:
“Using SQL authentication requires additional setup and configuration:
- All database accounts must be created as SQL Server login accounts in SQL Server 2000 Enterprise Manager or SQL Server 2005 Management Studio. These accounts must be created before the creation of any databases, including the configuration database and the AdminContent database.
- You must use the Psconfig command-line tool to create the configuration database and the SharePoint_AdminContent database. You cannot use the SharePoint Products and Technologies Configuration Wizard to create these databases. To create a farm or to join a computer to a farm, specify the SQL Server login that you created for these databases as the dbusername and dbpassword. The same SQL Server login is used to access both databases.
- You can create additional content databases in Central Administration by selecting the SQL authentication option. However, you must first create the SQL Server login accounts in SQL Server 2000 Enterprise Manager or SQL Server 2005 Management Studio.
- Secure all communication with the database servers by using Secure Sockets Layer (SSL) or Internet Protocol security (IPsec).
When SQL authentication is used:
- SQL Server login accounts are encrypted in the registry of the Web servers and application servers.
- The server farm account is not used to access the configuration database and the SharePoint_AdminContent database. The corresponding SQL Server login accounts are used instead.”
You can read the entire article here.