We just moved 10 colo'd servers over to ServInt VPS's last month and so far are extremely pleased with the results.
ServInt VPS's perform very, very well. The support is outstanding & you get full management, including daily backups. One big plus is that on a ServInt SuperVPS, you don't have to worry about hardware failures - if a HD or PSU fails on your dedicated server, you're down until it's fixed. At ServInt, you may never know anything was wrong. And in the event you are aware, you don't have to wait for it to be fixed, as the underlying hardware is not your responsibility, ServInt will take care of it ASAP.
It's easy to say you should go dedicated for the price... but for the starting price of $199, you get a fully managed server instance burstable to 4 cores + 8GB of RAM. You'd definitely get more HD space on a dedicated box, but I think you'd be hard pressed to find a similar level of performance + management + support in a dedicated at that price point. IMHO it's definitely worth considering.
I agree with the above poster that a powerful VPS may very well be the way to go, but keep in mind that ServInt uses Virtuozzo, meaning that you won't be able to do things like build a custom kernel, and also that your environment is less secure (basically it's just a directory on the host file system) and compartmentalized than it would be in a dedicated environment, or on a Xen VPS.
If you're looking to get a high performance VPS, always go for Xen. Xen is so far one of the few technologies that can truly guarantee memory. Whether you get a VPS or dedicated server, the provider is always responsible for hardware failures. But be sure to check the hardware SLA.
Advantages of a beefy VPS
+ you will be running on server-grade hardware (dual xeon processors w/ n+1 redundant power supplies, ECC RAM,SAS)
+ performance can be better than a lower end dedi
+ software licensing is generally cheaper on VMs
- Overhead of one extra network hop (non-fabric switching)
- No resources guarantee (besides memory on Xen)
- other VMs on the same node have the potential of impacting your VM (for better or worse).
- No real time processing due to virtualization overhead / context switching fairness (if miliseconds matter and often they do)