"Use of dedicated sockets is
enforced."
To me this says, create one unique socket for each connection and use it throughout that connection.
EDIT: Just to expand on this, from the servers point of view.
UDP sockets are not identified by the
remote address, but only by the local
address, although each message has an
associated remote address. (source).
That way the server can distinguish from which client each message came from. Because the remote address is made up of an ip address and port combination, you should use the same socket throughout your communication of the sever. This is because if you don't, it's possible you could get assigned a different port next time you change the underlying socket.
"If the server looses UDP connectivity
with the client, it will ..."
It is possible to loose UPD connectivity e.g. either of the endpoints in the connection is lost, say I go to the server and pull the plug?
EDIT2:
Dan Bryant makes an excellent point in the comments, that links in with what I was saying about.
One thing worth noting is that it's
possible for a call to a UDP socket to
throw a SocketException with
SocketError.ConnectionReset as the
error code. UDP does not have any sort
of session with structured
connect/disconnect, but it does use a
dynamically-assigned remote port to
allow replies, which is a kind of
'connection'.