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→The Down Side
Any time you add another layer then you have another layer of things that can go wrong. It takes some learning to understand the process and there is the possibility that one person can screw up the system for everyone. As virtualization develops it will get better. OpenVZ is very stable in that it is far less intrusive than other virtualization methods. It is limited to Linux only so BSD and Windows users will have to do something else.
= Conclusion =
I believe that VPS represents the future of computing. The space, power, and cost savings are too great to ignore. I see data centers that are massive clusters running tens of thousands of logical servers that transparently migrate around the physical resources and are up 100% of the time. Customers no longer will have to deal with issues of backups they way they have to now and it will simplify the hosting process. I think that every data center should be looking into virtualization technology now with the idea that you are going to be doing this and it's time to at least start thinking about it and exploring it with an eye towards the future.
I have to say that my view of VPS has radically changed and that I now see this as a solution not just for people wanting little servers but for most everyone who is looking for dedicated service. VPS is a different way of looking at the computing world and it takes some significant mental adjustment and education to grasp the big picture.
