I use all of Rackspace Cloud's offerings (Cloud Sites, Cloud Servers, Cloud Files) and I've been satisfied so far. I also use GoGrid for more advanced applications, as they offer free hardware load balancing and mountable cloud storage.

I'm assuming you're interested in Cloud Servers vs Amazon EC2? Depending on your usage (mainly bandwidth in/out), one or the other may work out slightly cheaper, but for the most part they are about the same price (although with Rackspace, support is free and very good). A huge advantage to Rackspace is that the instances can be resized on the fly, and they allow bursting.

For example, a 2GB Cloud Server (based on server RAM) is 1/8th of a quad core 2.4GHz server, but that is a CPU floor, meaning that 1/8th of the server's resources are guaranteed, but if you have a brief spike and there are sufficient resources on the host, you can burst to 100% of 4 cores. With EC2, you can never go above the allotted resources.

As far as outages go, Rackspace had some bad luck with their DFW datacenter this year, but I wasn't affected. The SAT datacenter seems to be more stable.

The answer is - "It depends", on a lot of parameters like: 1. Do you need a dedicated box or a virtual OS on a shared box will do? 2. What are your avg monthly usage requirements- box and bandwidth? And how these requirements shall change of time. 3. You want to customize you box's configuration before u rent it? 4. You want to pay monthly or yearly or more? 5. Will you need additional throw away on demand computational nodes? How often? 6. Do you just wish to use servers or other services like S3, SDB, SQS, cloud-files(rackspace)? Many more ....

So I think if you describe you requirements and budget better, the suggestions provided will be better.

About problems like low speed, outages, etc. Yes both have their own set of problems, but still a more relevant answer can be given when you have illustrated you requirements.

I have been using EC2,S3,SDB for one of my projects(last 4 months) and Rackspace/Mosso cloudserver for another (last 3 months). Since the durations are short I may not be able to explain everything, but will try my best. :-)

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One thing to consider is that rackspace doesn't seem to have an EBS (elastic block storage) equivalent. You can not mount any of their NAS offerings to a cloud server.

This means a few things:

  1. Your cloud servers top out at 620G storage per 
     instance.

  2. You can not scale the storage separately from RAM/CPU.
     To get more storage you have to buy the more expensive
     instance types, even if you don't need the additional
     RAM/CPU.
 
  3. You can not increase throughput nor reliability by 
     doing a soft-raid over multiple mounted storage 
     devices.

I've used and had good experience with both platforms. The only performance issues I've ever had were with SimpleDB when it was in beta.

For support the nod would have to go to Rackspace, in my opinion. The two times I've needed help I was talking to a real person in San Antonio within twenty seconds or so, which beats a post in the AWS forums that might eventually get answered from an employee if your lucky.

Here's what I'm doing at the moment:

Slicehost for web server, backend processing and db. This allows me to scale each major part individually. The processor agents store a bunch of stuff on S3.

I'm probably going to change this to using the backend systems on Slicehost just as schedulers and do the actual processing on EC2. The biggest concern here is transferring the data back and forth. If Amazon provided functionality identical to Slicehost at the same economics, I would switch in an instant.

Does anyone have any experiences with Rackspace Cloud Sites? Is it a good way to get scalable hosting without worrying about provisioning new instances and such?

I use Linode for my sites and haven't had any problems. I've heard that Slicehost has a better control panel (Linode has practically nothing apart from allowing you to provision your resources), but I didn't really need those. I just needed a VPS with root access that wouldn't break the bank, and Linode fit the bill.

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I haven't used Amazon myself, but a good friend of mine has done quite a bit with it. When I asked him about it, he said (IIRC) that one thing to be aware of what that you couldn't run a MySQL DB on one of their small instances--you needed a large instance. So, something to keep in mind.

(Please do verify this--I may have misremembered or the facts may have changed since I heard this.)

I recently switched to Slicehost. For me, it's exactly what I want. A flat monthly fee for a server instance and easily upgradable as needed. They provide a choice of Linux systems, and from there you're free to build as you see fit. They offer reverse dns, which is vital for running mail servers and not available on Amazon( last I checked. )