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depends on how you had it set up originally; if your original database settings were absolute (eg using the actual internet-reachable name of the server hosting the database), then the lookups would still work when the site and scripts were moved to another box. However, people almost never do this, and instead use "localhost" as the name of the database server when situated on the same box. This is done for convenience purposes, as well as to avoid dns lookups of a FQDN that is in reality located on the same box.
As mentioned above, you will get a performance hit on lookups, but depending how close the two hosts are to each other, it may be small or large. Best advise would be to only do it as little as possible. Your new webhost will likely also count all traffic for the database lookups and results sent back against your quotas -- this could be a significant amount depending on the application you have in mind.
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