A few of the projects I have been working on lately make use of two great services - Engine Yard and Rails Machine.

Rails Machine is more of a do-it-yourself host with a focus on Rails. They have some great Capistrano scripts to help get your app up and running quickly. Then they get out of your way and let you do what you want with your server. On one project I am currently working on, we use Rails Machine for hosting our Subversion repositories as well as our private staging and demo sites. I also did some integration with Subversion and Marshmallow to provide updates to our development group's Campfire room. In short, I've had no problems with Rails Machine and recommend them to anyone considering.

Engine Yard is another great service I've been using recently. Their model is based on reliability and scalability. They sell "slices" of resources - similar to a VPS but slightly different. Need to make sure your application running on a single server (slice) does not go down? Just add another slice. Engine Yard makes sure this second slice resides on a separate physical server, so any issues that may arise on the first slice's host do not affect your site. Need to handle a sudden spike in traffic? Just add another slice or two. I recently had an issue with a project and its slice that I was not even aware of - the site would disappear from the Internet for a few minutes and then come back like nothing had happened. Engine Yard offered to fix the problem and "loan" us a slice for redundancy until the problem was resolved. That's what I call service!

I know my way around a server, but my area of expertise is development. I think that when it comes time to deploy an application to production, it's best to let the pros handle the real server-side issues. I recommend both of these services for just that.