Unfortunately there are a lot of small hosting companies out there that make themselves look big and do not bother to tell people that they are sharing server resources. This is where there could be big problems with server rooms or facilities. I think that having worked in a hosting company that many things are done that the client does not know about and would not really like to know as they would end up taking their business elsewhere.

Ok I think the term ' you get what you pay for' comes into play here. It looks as though (after browing on my own) this could be the case. I only pay $3.95 a month and thought I was just getting a bargain off a smaller WAHM helping company but the more I read and the more I understand, I think I'm getting ripped off. So, thanks for th information, I'm off to find a REAL company lol

As a VPS provider, I'd have to agree with the observations and math in this thread. There are a lot of different methods of virtualizing a server, but the ones that can reduce end-user costs to as little as $3.95 a month share the machine across hundreds of users. This means each individual VPS gets very little resources, not to mention giving up on the "P" part of VPS, since these high-density solutions typically share system and middleware code across users as well to save on total memory allocation. One of the most effective high-density virtualization solutions, Virtuozzo, already restricts the number of client VPSes on a machine into the range of 20-40, which means you'd be paying a lot more than $3.95 a month. True VPSes are completely isolated from other virtual servers on the same physical hardware, both in terms of security as well as resources (CPU, memory, I/O) and offer guaranteed performance - but they come at a premium, costing $50 and up depending on how much CPU or memory you need.

It really depends on your intended use. The $3.95 solution is great for hosting a little PHP-based website to manage the family photo album, but you wouldn't want to run a web store or SaaS application on it.

-Eric