Firstly, the domain name doesnt matter Mark, its the content and account holder on the server that matters. It can be accessed via a .DE domain name or even a straight IP address, so it can't be dependent on the domain name owner. I forward my djmattyc.com domain name to MySpace, but I can't be held liable in any way for the content on thier site. So forget the domain idea.
Basically, if the content can be traced to you, then you become liable for the content, which is why so many wiki sites and forums have strong disclaimers protecting themselves, organisations and domain names from legal liability for what their users post.
If the host recieves a complaint regarding the content on a users website, dependent upon how their acceptable usage policy is laid out with regards to network abuse, then access to the content could be suspended.
In most cases, the plaintiff will usually send a strongly worded letter, sometimes with the general feel of a solicitor letter, to force the host to remove the content immediatly, as we hosts dont like to become entangled in user legal battles, no matter how loyal the customer is.
However, until you recieve such a letter through the post, don't read too much into it to be honest, the plaintiff will just be happy the content has gone. I wouldnt start the site up elsewhere however, as if you have gotten away with it this time, the next time you may not be so lucky.
The costs to her company are going to far outwigh any real gain, and its for this reason I highly doubt she will take it any further this time. Just don't put the content back up and if you have heard nothing via the post within the next week or so, then you can count yourself lucky and forget about it.