Basic VPS (on stable provider) + nginx + php-fpm + eaccelerator, barely noticing any kind of traffic spikes (handled SlashDot, HN, HabraHabr, Reddit, Delicious, many others).

Of course it depends on how intensive your app is, but for moderately loaded site - this combination is more than enough. For ex. I've tested Wordpress with this configuration - it can handle nearly 70 mil. hits per day (including into this number hits to images, so probably around 10 mil. actual visitors).

Wouldn't recommend for real-time upgrade (during spike). For real-time go for this: http://gist.github.com/638751 (if load average > 5 - sorry, exit). Crude, cruel, but helped me survive being unexpectedly TechCrunch'd on Apache (didn't know about nginx at the time), then you can finally edit your files, go for caching of nearly everything.

Is HN traffic really that heavy? Last summer I made #5 on one post and #1 on another one. Here are the stats for those two posts:

http://jlongster.com/media/static/stats.png

It's only a couple thousand. Maybe this link got passed around a lot more, but it's not too hard to scale up to several thousand.

It works for me here in San Diego - took a little while to load but it works. Just open in another tab and come back later