I'm currently using WebFaction to host my Pylons based web app, which is under development and really not that close to be ready for public use.
I've had some issues with WebFaction. Mostly it's just that every once in a while I want to be root, though I have other gripes as well. The reason I stick with it is that it's cheap.
What I'd love is a virtual hosting platform, but I'm not sure when ones offer the best bang for your buck. We don't have any money yet, so Amazon EC2 doesn't make sense right now (it's not very cheap until you get some traffic). I've looked at Joyent, but I haven't heard whether they're any good or not.
So, what does the YC community recommend when it comes to cheap, development stage virtual hosting?
http://slicehost.com