My experience with dedicated servers dates back to 2003 when I started working with USC at County Hospital. We decided to shell out for an off-site dedicated server because we had no control over the network firewalls, switches, DNS Servers, or routers. This was all managed by the hospital; we just had our little LAN on the inside. This made simple firewall adjustments a nightmare, as we had to coordinate and justify all changes with Hospital ITS.
After a week or two of research we decided to go with Rackspace. At the time Rackspace was still a relatively new company, and the price seemed a bit steep. I had worked a NOC position at Tierzero in 2002 so I had some familiarity with Datacenters/colos., Rackspace.com had a diagram of their datacenter and it was such a logical, detailed, and beautiful infrastructure.
The cost was easily justified because what you are getting is a “managed” dedicated server. This is very different from a run of the mill dedicated windows box and let me tell you why, Support. Rackspace has a 24×7 support team and efficient ticketing system that often garnered responses within 10 minutes (from humans not auto-responders). Because we had mission critical web applications being served up on this server, it was necessary to have a “Second line of defense” in the event of an emergency. I was pretty new to Server Administration at the time, although I thought I knew it all 
Generally speaking, if you can afford it, and if your client (or employer) cannot afford downtime, it’s good to get as many people on your back as possible, just in case something does go wrong (see: murphy’s law).
Below Rackspace the “premium provider”, comes all ”midrange” providers. These providers are “unmanaged” by my standards, have longer support times, less helpful staff, uglier/less functional customer portals, less efficient datacenters, more downtime, etc. The only midrange provider I have experience with is Hostway. See the difference yourself, check out some of the comments here.
Another option more recently became available, servers in the cloud. We recently migrated all of a client’s websites from a dedicated server to an Amazon EC2 Instance and to my surprise it was quite painless. Amazon.com as you know is the biggest online retailer to date. They launched their Amazon Web Services (AWS) product some years ago and it offers Windows Instances. This solution is definitely for the techie/sys admin type as you get no support what so ever out of the box, although they do offer support services via ticketing for an additional cost, IMO this will still not be close to the service/support you are getting with Rackspace.
If you want the best of both worlds, have a look at Rackspace’s cloud offerings @ http://www.rackspacecloud.com
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