Thus far with BV Commerce I've been using 1&1 cloud hosting for a test site and it seems to be running pretty well. I've always used virtual hosting for smaller sites and have had pretty good luck with their performance but the scale has always been small. Performance can really depend on a number of factors...physical hardware capacity, hosting centre infrastructure, number of clients the hosting company shares the same servers across and their usage, how shared bandwidth is allocated, etc.

What hosting company are you using?

The problem with offsite hosting in general is that you really don't know what you're truly getting for your money because the hosting company has so many clients.

If you have the time and energy or MIS staff that can help you out, it's worth setting up performance monitoring to measure your server usage stats, and inbound/outbound bandwidth stats, and any other stats that are measurable, so you have objective data to see how things are running from the hosting end of things. Cacti is a pretty good tool for that, http://www.cacti.net/.

Rackspace cloud hosting was also pretty good for a site that was getting millions of hits on a monthly basis. Their architecture can dynamically scale pretty well, but I wasn't a fan of the limited server control. Some of my colleagues have said good things about Amazon EC2 cloud hosting as well.