it's functionality does not reduce at all, when kept at scriptlogic's site. but it affects how ppl see it.
as example, think about http://www.apache.org/ which has HTTP server site at http://httpd.apache.org/. what would ppl think about if the HTTP domain would be something like www.microsoft.com/support/ApacheHTTP ????

the place where the files can be whatever, but the URL can't refer to profiting organizations domain. if kept that way, it's seen as just one way to get more customers...
I don't know how american's think, but I get allready too much commercial stuff (visible & hidden) to like it.
also, the image ppl get about soft and it's reliability as how long it will be going on, is dependent the URL. when kept under commercial domain name, one can't miss the thought that it is no more when company crashes or desires to stop the service.
otherway around, if there would be a site named example udf.kixtart.org and it would reside on scriptlogic's site, it would also have powered by scriptlogic banner, which tell's to ppl:
"hey, that succesfull company trusts in that language, why shouldn't I?"

so: as a summary I might state, that it does not reduce the functioning of site, but can draw unwanted figure to one's mind.

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