I don't run a hosting business, but I run a hosting directory that directly competes with hosting companies on PPC engines, and I'm very happy with Sprinks traffic. While I can't directly track the results (other than what advertisers say), I must say bids are significantly lower than Overture, and the traffic was of quality meaning they actually stayed at my page-- of course that could be a result of several things.
As I said, I don't run a hosting company, but if I did I believe I would go beyond the technology/webmaster related sites, and try the Powweb marketing strategy. I see prices for hosting getting around the $2/month range, so why not put together tools, articles, and free templates and take advantage of how cheap advertising on entertainment is, and pitch the "Have your name for only $5.99/month!." You could even put that you'll give them a free web page, and teach them how to make it (through pre-written articles of course).
Just my idea. I've been involved in advertising for some time, and if I ran a small hosting firm my goal would be to expand the market by offering deals that appeal to beginners. That would include you giving them a web page, and hosting it for $5/month or whatever you could do.