In reply to the above.
- Our experience with Rackspace has been quite good, actually. Admittedly, we are paying them around USD 1000 a month, but they've got a few people looking after us, they answer very promptly (our team is actually based in Australia, yet we still usually get replies within a couple of hours), they seem to try very hard to help us, and they've also got several free-call numbers around the world. Of course, an anecdote is a data-point, not a trend, but our experience has certainly been positive.
- Hmm, not quite sure what you mean here. For EC2, it's basically more or less a VPS (with a few caveats), although I guess for more complicated cases, maybe it doesn't cover something? E.g. if you need to do something funky with hardware, that another VPS provider would accommodate you with?
- The pricing for EC2, especially with Reserved Instances is quite economical. For us, it's around USD 380 a year, per instance (24/7 for the year). Sure, you lose some flexibility with the Reserved Instances, but you can mix/match.
- True, for many providers. Amazon does offer a CDN, CloudFront, which offers edge servers around the world, though. I think Rackspace has something similar.
EC2 is a bit different to a VPS. It's essentially an unmanaged service, you have to do your own setup, and debugging (unless you pay for their premium support, and even then, I've heard stories...e.g. Bitbucket's recent experiences with EC2).
Also, it's built on pretty low-end commodity hardware, and there is an expectation that the underlying hardware can give way. We've had one instance go down in the 3 months we've been on it (well, fine, they gave us an email before saying it was in a degraded state...then kapow). So the point is, you're meant to build in your own resilience, and redundnacy, using things like S3 and EBS (Elastic Block Store), Auto-scaling etc. It does all seem to add-up, of course, and it often ends up costing more than it seemed to on paper. Still, it's IT, right =).