How powerful does MIIS hardware need to be?
A well designed MIIS system should be doing deltas, which do not require much horsepower at all. The synchronization engine does a very good job of tracking the state of objects in order to minimize the amount of work it needs to do to converge the changing data on the MIIS synchronization rules. A beefy MIIS server may be useful for the initial deployment when all of the data is being loaded and the full synchronizations are being run. Details of the Microsoft internal MIIS deployment configuration can be seen at: http://www.microsoft.com/technet/itsolutions/msit/deploy/cfimwiis.