Does a custom (i.e. one I've developed for SharePoint 2010) visual webpart have to operate within a sandbox solution in SharePoint office 365, or can it be a farm solution?
Thanks, Confused
Web parts have to be sandboxed for SharePoint 365. Visual web parts can't be sandboxed since the ascx control that comes with the web part is copied to the file system. if you need to create a visual web part in SharePoint 365 you can use the SharePoint Power Tools extension.
http://visualstudiogallery.msdn.microsoft.com/8e602a8c-6714-4549-9e95-f3700344b0d9
There you have the option to create a visual web part that can be deployed as a sandboxed solution.
Independent from the type of SP-I (SharePoint Item) you're creating, Office 365 only supports sandboxed solutions.
Microsoft is going to migrate Office 365 to SharePoint 2013 within the next weeks/months. When migration is done, you can also create Apps using the new SharePoint 2013 App model.
But for now, it's only possible to deploy Sandboxed solutions, because it's not allowed to do any changes to the filesystem or elements, that are available across the boundaries of your SiteCollection.
When it comes to WebPart development, you've to remember that it's not possible to impersonate using SPSecurity. (There are more limitations for Sandboxed Solutions, you should revisit the MSDN in order to get a common understanding of what you can do within the Sandbox)