To clarify: the dotCloud pricing hasn't actually changed yet, the new pricing has been released to a limited group to collect initial feedback, and will likely be altered before it's official release. That being said, the general model of differentiating between apps in a development sandbox vs those in production is likely to stick around.

As for your initial question: dotCloud and Heroku have rather different models for how applications are built and deployed, but in the end, the amount you pay for comparable apps will be about the same[1]. Though price is certainly an important consideration, it is probably not the best way to compare the two. The real difference is in how much flexibility you need. By making fairly strong assumptions about the architecture of your application (you will have a single blob of single-language code as a web front-end, PostgreSQL database, no local write access, fixed-size memory allocation for containers etc.) Heroku is able to optimize for apps that fit within those particular constraints. dotCloud, on the other hand, makes many fewer assumptions about these types of architectural decisions, leaving more power, but also somewhat more responsibility, in the hands of the developer.

This difference is a direct result of the two companies' origins: while Heroku used to be a Rails-only provider and has since opened up to multiple languages, dotCloud began life as a generic "service" runtime upon which more technology-specific abstractions have been built.

In short, which one is "better" depends far more on your own particular requirements than it does on the minor differences in price between the two.

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[1]: That is certainly the goal, at least: http://news.ycombinator.com/item?id=3860862

If, for some reason, that doesn't seem to be the case with the newly-proposed pricing model, that would be very useful feedback to send to pricing@dotcloud.com (see: http://beta-pricing.dotcloud.com/Contact/)

I personally prefer Dotcloud. I don't know if their new pricing model is rolled out all over, but it basically allows for unlimited 'development' sites so getting everything up and running should cost nothing until launch (though it will be memory constrained).

Post-launch, you basically pay for memory usage, so early traction costs very little, and you don't really have to worry TOO much about pricing until you've gotten enough traffic to be considered 'social proof'.

Ignoring cost, I can't necessarily compare it too strictly to Heroku as I've only used Heroku for rails. Anecdotally, Django was one of Dotcloud's reference applications, and Python support has been there for a lot longer.