I learned a invaluable lesson yesterday, this is something that most people COMPLETELY overlook.
I had 8 HOURS OF DOWNTIME overnight. 
No, this was NOT shared hosting, it was a dedicated Mediatemple Nitro $750/month supped up box.
They’re response to the downtime : “Sorry for the inconvenience”!?!
Needless to say, I immediately switched over to another web hosting company that I’ve been using for years.
What really makes me SICK to my stomach is all the potential sales I lost with Mediatemple due to smaller, intermittent downtime. Which I’m sure happened frequently-might explain some of those mysterious sales gaps I’ve been seeing.
What’s worse is that my business partner had to get the server up and running again, mediatemple did NOTHING. And they didn’t even notify me that my server was down.
“So Amit, what are you going to do to prevent this in the future?”
It’s all about having the right systems in place.
Well, here’s Rule #1: Do NOT trust ANY web hosting company, EVER.
Rule #2 : Constantly monitor you’re uptime, using a service such as Pingdom.
Rule #3: Use an enterprise DNS service that allows you to setup a DNS Failover. In other words you can setup your domain to automatically point to a different server if your main server goes down. I recommend using 2 DIFFERENT web hosting companies for this setup.
First things, first: setup a monitoring service such as Pingdom and see if your web host is screwing you over!
Honestly I don’t think it’s such a big problem. I’ve been using shared hosting that worked fine even with big traffic .. and using Amazon S3 for hosting big videos. No crashes so far, even with HUGE traffic in times of launches.