What is the best practice for setting up a LAMP server in terms of linux users and groups? If there are multiple sites hosted on the same server, is it best to have a single us
I did some kind of small level hosting over several years and my answer is "It depends".
First of all there is a difference between Apache Module (mod_php). CGI and FastCGI. A good list with all the pros and cons could be found here: Apache php modes
When it comes to security all of the modes have pros and cons.
Since we only hosted a relatively small amount of Domains with moderate traffic I decided to stay with mod_php and used vhost configuration.
I also used different FTP users for each vhost root dir (of course).
Configuring vhosts (one per customer) allows you to switch off domains the easy way without digging your way through a ridiculously big httpd.conf and producing errors on the way.