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That's got some really good information. Most important to me is that it does confirm my fears of flaky IO performance. He does point out some ways to tune it but it still seems like a rough experience.

These cloud services seem great for low IO apps but once you have to hit the database hard it seems like anyone's guess if your db will perform.

That's why I'm a big fan of Rackspace. You can get bare metal servers for heavy I/O and simultaneously have "Cloud" servers on the same local network (example: Github).
Are you actually using this sort of service from them? When I talked to them about 2 months ago, we couldn't get anything like that since their "cloud" stuff is in a datacenter you can't currently buy dedicated servers in. In theory, they're opening another next year that may solve the problem. It's hard to tell, though, since their sales people don't seem to have any experience selling a hybrid setup.

My understanding is that Github virtualizes things themselves, they're not running Rackspace cloud servers.

Anyone have any experience with NewServers? They offer dedicated server provisioning in about 5 minutes. On paper they look great but I have not found much commentary about their product anywhere.
I've been hosting with them for five years (last two @ newservers). Their support is great and they even helped installing my scripts. I ordered 7 differents servers since the beginning to create farms and their load balancing mechanism is also very cool. Cheap and quality service. I'm a non-US customer, my site is a top 100 site in my country.
Murat SARIKAYA http://www.msxlabs.org
FWIW: SoftLayer offers the same combo of dedicated servers and cloud offerings, and I prefer their turn around time, support, and pricing to RS.
That sounds like a good mix. I'll explore that option some more.