I think it's worth saying a few things...
Of course colo-ing your server and buying bandwidth direct are a great option... mostly in theory. Although not true in every instance, please consider the following:
1) As a single client you will not have the size or economies of scale to achieve a good price from your upstream provider. I can assure you that for the most part not a single Tier 1 sells bandwidth at reasonable prices for low commitment levels. And any large colo is unlikely to sell you just 1u, rather, they want to sell you 1/2 rack minimum.
2) Let's assume that all viable hosts are in a data center even though we know many BS and are simply in office buildings... Hosting is as much about providing good service as it is about the bandwidth space.
3) We're all owners of internet businesses. As site owners our time is best spent finding and converting traffic. Stepping out of the box of being a host, which I am, I am also a site owner. I value my time at several hundred an hour. It wouldn't take but one small instance in a month to buy an awful lot of server management.
4) If you know how to manage your server, great! Most do not. If you did know how to manage your own server your best bet would still most likely be colo with a large hosting company instead of direct with a carrier and facility. You will likely have the savings from their bulk purchase of space and bandwidth passed on to you. Also, remote hands are usually cheaper with a hosting company than with an upstream provider. I can assure you that you wouldn't like Verio's bill for such a service.
"Just so MOST of you are aware, almost EVERY hosting company mentioned in this thread is NOTHING more then a rack or two of dedicated servers in someones datacenter." VideoVoyeur
I couldn't agree more! A lot of the stuff I see posted online and read on hosting websites makes me giggle. One thing is for sure, far too many don't keep their sales pitch "real". I often think that we'd be well served by an independant watchdog group that could travel around and report back on what they found at each hosting operation... lol pipe dream!
I think some of the top companies in size are definitely:
RackShack
ev1servers.net
RackSpace
Choosing what is best really is a client-by-client decision. If you're a very competant server administrator then your best bet is to colo locally or colo with another hosting company elsewhere and manage your server remotely. At a certain point in revenue for a one man shop, however, managing your own server makes a lot less sense. Under the presumption you were with a great provider, which in some instances is alot to assume, then it would likely be cheaper and easier to have them fully manage your gear.
Just my
Brad