Hi,
SGEN generates the runtime of the programs.
Yes it is ok to run sgen in 000 client on the DB/CI server .
Just take a note that when you are running Sgen one db table space should have space and archive logs should be running as it generated huge archive logs.
Only thing is that some network speed will come in picture if Application server is used. So it might be little bit slower if application server are used.
Thanks
Rishi Abrol