The latest movement in web hosting is towards cloud hosting. This is the holy grail for the user and for the hosting company. Imagine a web host that scales as you grow. Everyone would love nothing more than a host that could handle getting slammed by Digg.

Amazon's ec2 service offers scalable services, but it is not a simple as your typical web hosting company. The Ruby gem ec2onrails will simplify the process of getting your Ruby on Rails application up an running. RightScale builds on ec2 to make it easy to deploy your application. They add a dashboard and make it easy to load balance and bring up new instances. However, at a starting price of $500 a month and a $2500 setup fee they aren't cheap. Elastra is another cloud computing service. They claim to not have setup fees, but I can't find a price on their site. The real advantage to these services beyond scaling really needs to be cost. Paying for what you use can be great, but can also be a bit scary. If you site takes off all of a sudden you might get stuck with a rather large bill, but hey at least your server didn't go down.

Mosso has the ability to let you host linux or windows. At $100 a month their price is reasonable and they can scale up depending on how many requests you make. 3Tera claims they can 'scale from a fraction of a server to hundreds of CPUs in days'. They also claim that you won't need to change your application code.

The Bluehost.com hosting space ($6-$7) isn't going away anytime soon. However, the future of scalable applications I think lies with cloud computing.

Thanks to Alain Benedict I am adding Morph to the list of services. I haven't had time to really examine the service yet, but it looks like it removes a lot of the hassle of hosting a Rails application.