They are overselling, but they can afford it in my opinion. Hosts that are established have the right to oversell since, they have the client base and income to do so. Anyway, here are some reviews on Site5. Doesn't look so good..
site5 reseller account does allow overselling. site5 reseller is one of the famous one... which i prefer recommend to my clients as well. do look at lunarpages reseller hosting as well. They are in same range.
site5 down? you will need to do tracert. most the time is the internet downtime at somewhere of the route