A new era of web hosting is starting. Shared and dedicated web hosting is always based in one server machine. Meaning that in case of a peak of traffic that server gets vulnerable, and most of the times crashes. New players in web hosting are appearing, these are Amazon, Mosso and Media Temple. This new services consist in one virtual machine from a grid of hardware servers. Being able to support peaks and not vulnerable to hardware failures.
The price is very competitive when compared to dedicated machines, from $20 USD to $99 USD per month per virtual grid machine. Though Amazon has a different price model based on hour of usage, 10 cents per processing hour. The Amazon EC2 solution is great for occasional operations or beta testing.