I've been a 1&1 customer for a long time, in fact for as long as they have offered service in the US. I started out with their "free for 3 years" shared host. Since then I've upgraded through two dedicated servers, the last of which is a Rootserver III for $125/mo.
While I don't really have any problems with 1and1, I am concerned with the aging server, and a bit upset that they won't lower my monthly cost without migrating to a new cheaper and faster server. Their cheapest linux box is a dual Opteron with mirrored 250G disks, 2TB of bandwidth, and a $100 pricetag.
So farewell 1&1, if I have to upgrade to get a lower price I'm going to upgrade right out of the dedicated server space and look at moving to single or limited purpose slice type hosts. This way each project has it's own server, a measurable cost, is easy to backup, and gains some reliability. Then if I need more power, bandwidth, or processor I can just pay for more.
I do still have one dedicated server, at Server Beach, and I will hang onto it for a while. I've only had one problem with them (disk failure about week 2) and their tech support was quick, professional and even returned my calls when they said they would. They appear to suffer from the same upgrade issue as 1&1, but at least what I have meets my needs and I'm not paying more than the cheapest offering. If you happen to buy a server at the beach, be sure to include my affiliate code: RESKKTY3QB. It will save you $100!
Farewell 475 days of uptime.