This is exactly the same setup I have done.

I think middle tiers as component (dll's) representing a 3-tier system are a tad bit exaggerated...especially when using a huge rdbms such as SQL Server.

The client dev folks dont quite see the benefits of what the server can handle.

O well..I guess just maybe next time I'll look into three tier.
For now..I don't see too many benefits.

Thanks for sharing your own work experiences.