What is the best way to host a multi-portal DNN site?

We're currently hosting our DNN site on a Semi-Dedicated server at webhost4life (we're one of four virtual instances running on the same hardware) and our site has just stopped responding three times in the last 2 days. We've had to have the support personel restart our application pools to get the site to come back up.

Does DNN run poorly inside virtual images?  We increased the memory to 800 Mb or our virtual images yesterday but we're still having issues today.  Does DNN run poorly in a virtual image? 

Is there something else we can look at to trouble shoot the application locking issues. We're plum out of ideas.

Any advice would be appreciated.

We run two DNN instances on virtual servers (using VMWare) at my day job and both operate quite well.  On the other hand, we have 2gb RAM dedicated to each of the two virtual servers we have running those DNN instances, one of the VM appliances is dedicated solely to our main DNN instance (intranet with roughly 1000 pages, 800 users, approximately 100k hits per week).  The other server has several applications running on it but actually receives much less traffic in general.

Aside from DNN, we have virtual servers running all sorts of stuff at work ranging from SQL servers to application servers, email servers, web servers, etc.

Depending on the virtualization software webhost4life is running, they *could* have the same issues we initially ran into when setting up our virtual servers.  We initially created the servers using "templates" and ran into an issue where performance was absolutely a hog.  After going through support with both VMWare and Microsoft it was finally determined that our issue was having installed from the templates and it wasn't correctly handling our dual-processors.  Reinstalling the servers from scratch knocked that problem out and things have been blazing fast ever since.  Obviously you have no control over how they install things, but it is certainly something worth mentioning to them.