Technically the SLK could be installed in a Hosted environment....
However - I've explorered this a bit and find that hosted environments typically will not give you access to / nor allow you to run - the necessary utilities with which to properly install all the SLK components - (for example stsadm / gacutl -
to install components to the GAC and Sharepoint. There's also some modifications to Central Admin functionality as well). Maybe someone else out there has a different experience with a particular Hosting service?
Options - to get it off premise - lease an entire "server" - and you can then can (have to!) do your own setup / management. SQL / SharePoint / AD / Backups ...
Looking forward to other comments to see if anyone has accomplished this.