1) Do I need to install all of GT 4.2.1 on each host or can I just
install GridFTP on 4 hosts ( 2 in A and 2 in B) and RFT on the 5th ? I
intend RFT to be on a separate machine from the GridFTP hosts, is this
ok ?

that sounds right.

2) Recent GT documentation mentions that a separate database
(PostGreSQL, MySql) is not required since GT uses an internal DB
called "Derby". Does RFT need this internal database ?

you can use derby or an external database (postgres, mysql), it is your choice

3) If we wanted to transfer a large file from Site A to Site B, how
can we setup the system so that the all the GridFTP servers in both
sites can be used for transferring the file ? I assume that using more
servers will result in a faster file transfer, is this correct ? if so
how to set it up ?

this is called a striped transfer:

http://www.globus.org/toolkit/docs/latest-stable/data/gridftp/admin/#gridftp-admin-striped

4) For authentication between the servers and certificate management,
is MyProxy required on each server or is only one instance of it
required ?

1 instance should suffice.

5) Is there any example of GridFTP setups anywhere, i.e.
documentations on such setups etc that I can refer to ?

there is a bit of information here:

http://www.globus.org/toolkit/docs/latest-stable/data/gridftp/admin/#gridftp-configuring

and a tutorial here:

http://www.globus.org/toolkit/data/gridftp/tutorials/

Thanks in advance
Arn

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