I too have been playing around with the different virtualization
possiblities, and I believe it all comes down to one choice.  OpenVZ
is easier to get going but doesn't guarantee that the hoster is not
overselling.  Xen is harder to get going (in my experience, due to pae
quirks and other stumbling blocks) but once you get it going it's just
as easy to use and gives the customer the added satisfaction that
he'll be using dedicated hardware resources that the host machine
actually has, rather than overlapping limits like you can with OpenVZ.

I will be launching a vps hosting service in the next month or so but
I have a lot more testing to do before I'm satisfied with my final
choice.  The hosting service will be aimed at rails development, not
production.  More details to be announced very soon.


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