I got this message form dreamhost saying that they have put some sort of restriction on my site where max 50 connections are opened in 5 seconds (which resets every 5 seconds) One of their tech guy commented .. So what does he imply?? I move my site from shared to dedicated hosting - why can't he say it in plain then? In fact traffic on my site has decreased considerably over the time but probably they noticed high CPU usages just now - still its not that bad IMO. I have their yearly plan - if I have to move my site in between its such waste.
Lot of people have very bad experience with dreamhost. Some people says that they limited time to upload files to their websites & such kind of other thnigs.
The reason they didn't recommend dedicated hosting is because their dedicated hosting uses the same shared MySQL environment. So basically that wouldn't help. Unless you mean HTTP connections, then I don't know. Just recently had a problem with them with MySQL. If you want your site to be reliably online and you are experiencing downtime now, then you should switch servers.
I use dreamhost, and run loads of sites on them, all use sql and php, all are running fine. Most get over 1000 uniques a day. What are you doing to get these max connection problems? Do you think some code you have writen is keeping connections open? Are you getting lots of spam writing to your database? Are your sites just really that popular that they do need their own hosting? Dreamhost is great because its sooo cheap, and gives you soooo much bandwidth/storage. but if it has even let your site become popular enough to get that many visitors that it can no longer cope, its a good thing. I always saw dreamhost as a stepping stone, with their cpu limits (which they have no dropped), until my sites were really popular.
Well, getting a starter VPS should be good enough as I sense mid-high resource usage...so the same story if he again goes with another shared host.