The major problem with 'in the cloud' assuming you mean something like EC2 or Rackspace Cloud is performance. Many of those types of hosts use a similar setup

The major problem with 'in the cloud' assuming you mean something like EC2 or Rackspace Cloud is performance. Many of those types of hosts use a similar setup for file-systems (Amazon might not, but not sure): GFS. Now, GFS has suffered from problems, and even huge, expensive hosts like EY got hit with it. In fact, the last time I worked with cloud hosting (I much prefer my own box) load times for static images could take up to 200 ms due to the design of GFS. My suggestion is either go shared (If you don't want to learn sysadmin tasks) or if you do, go with a good VPS host, or get a dedicated box.