A host has to make a profit to continue operating. Some hosts do not properly understand the market, and may be pricing themselves too cheap. At times you will come across deals that are almost too good to be true - cheap web hosting with amazing features! There are hosts that while offering cheap prices do back that up with excellent performance and service, but there are things to be noted:
1. Look very closely to what is written in their terms of service (TOS) and acceptable use policy (AUP) documents. Some hosts try to limit the activity of the customer through these two.
2. The quality of bandwidth and the overall performance. Some hosts skimp on these to give you cheaper prices. Do a self test - visit the host's website multiple times in a day to see that it remains fast loading.
3. In general, Windows Hosting is more expensive than Unix hosting.
4. Test out the support, and take a look over the online documentation. If you are paying less than $10 a month (which is roughly 30 cents a day), do not expect to receive an answer right after email the host. Many hosts now offer flash tutorials online which can be an excellent way to learn how a feature works.
5. Do some research - visit Google and WebHostingTalk and look up feedback on a host.
Just because a host is cheap does not mean that you will receive 'cheap' service, but you must be careful.
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