I've heard bad things about the 1and1 host company, but are they the same company or affiliated with the 1und1 company of Germany?

I have a friend who hosts lots of sites with 1und1 of Germany, never had any problems with them.

Yes, it's the same company (different staff / server location of course).

I have one of those free 3 year promotional hostings with 1&1 USA, and I cannot say that I am unhappy with them (given that the package came for free). There were a couple of issues I didn't like, for instance PHP runs as a CGI module causing trouble with some scripts, but network reachability was very good so far.