That cheapo one might be an uncommitted reseller. I used one a few years ago. Very cheap, and very helpful. Then my site went 'missing'. By the Grace Of God I was able to get in contact with the owner, and make a backup, before the service was closed down. I found out later he had only about six customers.
Use a popular web host. Avoid ones that are trying to attract customers by undercutting rates to silly levels. If a deal seems too good to be true, it probably is.
2. Their Google PageRank gives a clue as to how popular they are.
This will irk the smaller hosts, but if your site is a serious one, put it on a serious host. Web hosting costs peanuts these days. People can be funny about spending an extra $5 a month. You'll wish you'd paid $500 when your site goes skew-whiff, and you can't get a reply from their technical support.
3. Send them an email or two. See how long it takes to get a reply.
This can be very revealing. If they take two days to get back to a potential customer, how long do they take to answer their _existing_ customers?
4. Check out their forums; how busy are they? They don't have a forum? Next!
They should have enough customers to run a forum, and care enough to have one. Reading it can give you a clue as to what their support is like. Likewise, see when they had the last news update on their site. If it was long ago, they may be moribund.
5. Technical Support.
This is as important as the features they supply. It's no good having a Virtual Private Server for $10.00 a month if there's no one there to answer your emails when the hard-disk fails.
6. Features.
Most geeks favour Unix. It's been around longer, and is more stable. Web hosts offering Unix variants like Linux have always been cheaper. They also seem to offer a wider range of toys. I need SSI (Server Side Includes), SSH (secure Telnet), 10 MySQL databases, Cpanel, PHPMyAdmin and a UK IP number. And you can get this for $15 a month.
Things like MySQL databases, Cpanel and SSH access are real sticking points for a lot of web hosts. If they're generous with these, you've found a rare jewel.
7. Word Of Mouth.
Webmasters are always asking about web hosts on webmaster forums. Find a few recent threads, and note who gets the most votes. Search engines, on the other hand, have been spammed by some hosts. If you do a search on 'the best web hosts' or 'top 10 web hosts' you'll get puff pages. Recent opinions from professional webmasters are the best.
