Hmm... I host this site on a dedicated virtual server, meaning there's a single machine running quite a few virtual servers concurrently via software. This offers me a lot of flexibility, as I install and maintain the OS and all software installations. A downside is that occasionally, the parent host takes a performance hit, and my server experiences a slowdown as a result. From what I've seen though, this doesn't happen very often...
If (and when) the site grows and there are supporting dollars to do so, I'd definitely upgrade to a better package, meaning our server would be sharing resources with fewer servers and experience less performance hits. I currently only monitor the site for availability, but will look into monitoring response time as well since you guys mention it.