Hosts with lots of accounts on 1 server can be very risky for you SEO options.
 

I knew that the IP of the account was not a factor when Google decided if your domain is going to move up the SEO ranks. But according to this Article by the Google filter guy himself the Hostname is a factor. I am sure it's not black and white but...

A host with thousands of accounts on one server like hostgator, godaddy, and I have heard dreamhost mean if another website on your server is in on the front page og Google you are very much less likely to get on there after.

"Seven of the top 10 results all came from one domain, and the urls look a little… well, let’s say fishy. In 1999 and early 2000, search engines would often return 50 results from the same domain in the search results. One nice change that Google introduced in February 2000 was “host crowding,” which only showed two results from each hostname (here’s what a hostname is). Suddenly, Google’s search results were much cleaner and more diverse! It was a really nice win–we even got email fan letters. Unfortunately, just a few months later people were creating multiple subdomains to get around host crowding, as the results above show. Google later added more robust code to prevent that sort of subdomain abuse and to ensure better diversity. That’s why it’s pretty much a wash now when deciding whether to use subdomains vs. subdirectories."

Yep, i don't use subs now, well at regarding SE's that is.
Don't expect to get a good listing with them.

As for the over crowding servers, i was 99.9% sure about that. Now i'm 100% sure hehehehe

if you get more global backlinks than the guy currently on the first page/same host , you can knock him off and take his ranking... meaning, don't worry about who you host with.

Worry about getting backlinks and frequent updates using the same keywords that are used in your backlink anchor tags.

Google Panda loves global backlinks more than any other update in recent history.

~Ray

The downside about using subdomains is often google will see these as seperate sites. Which means you need to establish a lot more backlinks for each subdomain to be ranked anywhere descent. I'd rather keep those links to a single domain than spread them to tons of subdomains.
WG

And it weighs on Apache more. Directories load faster and I think looks cleaner.

If U.R. Gay... Problems OCCURE... :2 cents:

This isn't necessarily true. In regard to backlinks, there's almost no evidence that Google takes into account domain-level markers. For content post-panda this is certainly the case (at least in regard to the penalty), but backlinks still aren't a factor domain-wide.

As long as your subdomains are interlinked in the same manner as a normal site, the pagerank/trust/linkjuice/whatever should pass between them as fluidly as before.

If you want an example of this, check out Hubpages. To combat the Panda update, they began issuing authors their own subdomains. This would appear counter intuitive because then each author would be missing out on all the link juice from the Hubpages domain, which would ultimately result in lower rankings (or no increase at all after the penalty was removed.) Instead, what happened was that most of the pages were restored to their pre-Panda rank.