We're working with PostgreSQL very successfully on a moderately large project (approximately 12GB of data in our working set)
Currently we're on a 2GB RAM machine with 7200RPM disks. You can imagine the performance goes to hell quite quickly, even with clustered tables and proper indexes, optimised queries and design, etc. We spend most of our time waiting on I/O, for both read and write operations.
We're putting another 2GB of RAM in the box and a 10kRPM Velociraptor disk but those are just stopgap measures while we work out how to go on from here. The whole set is updated very often, so SSDs are out (too expensive too- this project is being run by two students with no money!), and I'm kind of interested to hear if anyone else has any suggestions for cheap (<£100/mo) server/VPS solutions which would involve 12-16GB of RAM and/or snappy hard disks. Or, even better, an alternative solution to the problem. Are there any hosts who specialise in database hosting?
This is kind of a 'oh god there has to be a better way' post, but the basic gist of this is- are there hosts or solutions available at this cost point, if not why not, and what are the cheap solutions to this sort of problem?