For what it's worth a co-worker was using the $9/mo DreamHost plan and it was painfully slow. While he was working on his project, he had a static html page as a landing page. It only had an h1 tag that said "Coming soon". It took about 10-12 seconds on average to load the page. DreamHost also broke his rails installation (basic rails set up) and they told him that he must have broken it because he was using a "custom build of rails". They later admitted they broke it with a server update.

I convinced him to move to a 512mb Linode and he has been extremely happy since.