I agree with everyone about using hardware with AOLServer - it flies.
I am, though, in the progress of moving some small openacs sites from a (very old, and still fast) physical server to linode which is going pretty well so far.
I thought people might be interested to know that linode VMs are multicore:
mark@li165-84:~$ cat /proc/cpuinfo |egrep 'processor|model name'
processor : 0
model name : Intel(R) Xeon(R) CPU L5520 @ 2.27GHz
processor : 1
model name : Intel(R) Xeon(R) CPU L5520 @ 2.27GHz
processor : 2
model name : Intel(R) Xeon(R) CPU L5520 @ 2.27GHz
processor : 3
model name : Intel(R) Xeon(R) CPU L5520 @ 2.27GHz
Of course this is all shared, but with the right plan and assuming the right level of contention, you are getting benefits from the aolserver threading.