September 2008: euro is very strong and dollar weak, which makes hosting of web sites very cheap in the US. Anyway, for Rails hosting, the offer is very limited in Europe ...
Even if the cost of the service is important, what's matter most for a web site hosting is the quality of of the service and especially the response time and skills of the help desk.
Let me tell a story about Piensa Solutions. Some I know had an important web site hosted by them, theychose them because they claim 33 000 customers with 150 000 hosted sites.
Because of a mistake of their billing departement, they decided to "stop" their server without any warning and they needed more than 2 hours to reply. This is the email they sent:
Basicly, they say that:
"You did not pay a bill so we cut your service" ...