To take an example, consider a set of discounts available to a supermarket shopper.
We could define these rules as data in some standard fashion (lists of qualifying items, applicable dates, coupon codes) and write generic code to handle these. Or, we could write each as a chunk of code, which checks for the appropriate things given the customer's shopping list and returns any applicable discounts.
You could reasonably store the rules as objects, serialised into Blobs or stored in code files, so that each rule could choose its own division between data and code, to allow for future rules that wouldn't fit the type of generic processor considered above.
It's often easy to criticise code that mixes data in, via if statements that check for 6 different things that should be in a file or a database, but is there a rule that helps in the edge cases?
Or is this the point of Object Oriented design, to stop us worrying about the line between data and code?
To clarify, the underlying question is this: How would you code the above example? Is there a rule of thumb that made you decide what is data and what is code?
(Note: I know, code can be compiled, but in a world of dynamic languages and JIT compilation, even that is a blurry concept.)
I would say that the distinction between data, code and configuration is something to be made within the context of a particular component. Sometimes it's obvious, sometimes less so.
For example, to a compiler, the source code it consumes and the object code it creates are both data - and should be separated from the compiler's own code.
In your case you seem to be describing the option of a particularly powerful configuration file, which can contain code. Much as, for example, the GIMP lets you 'configure' plugins using Scheme. As the developer of the component that reads this configuration, you would think of it as data. When working at a different level -- writing the configuration -- you would think of it as code.
This is a very powerful way of designing.
Applying this to the underlying question ("How would you code the above example?"), one option might be to adopt or design a high level Domain Specific Language (DSL) for specifying rules. At startup, or when first required, the server reads the rule and executes it.
Provide an admin interface allowing the administrator to
... all of which would happen at runtime.
A DSL might be something as simple as a table parser or an XML parser, or it could be something as sophisticated as a scripting language. From C, it's easy to embed Python or Lua. From Java it's easy to embed Groovy or Clojure.
You could switch in compiled code at runtime, with clever linking or classloader tricks. This seems more difficult and less valuable than the embedded DSL option, in my opinion.