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In most cases a database host is a specific kind of dedicated server, which is going to be used to run a database intensive application. The server can either be just for the database itself or it could also run the web site too, it really depends on how much system resources will be needed by the database. A system setup to run intense database applications will have a significant amount more RAM than a regular server. For example, if you are looking at a regular web-hosting server and you think 512 Megs will be enough then you would probably be looking at between 1 Gig to 2 Gigs for a database server.
Anyone who is using a database intensive program like a CRM, ERP, or a custom made application should look into a database host because they have more memory, which will increase the speed and reliability of the application.
No a database server can be used for anything but it is a specific kind of dedicated server that is setup to get the maximum performance out of a database or applications that rely heavily on a database. To do this the server has a large amount of memory and a few other configurations are done so that the database is the priority over anything else running on the system.
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