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All the "Virtual Private Server" VPS suggestions seem to be AC so may not make the viewing cut. I'd recommend taking a look at:

http://lowendbox.com/

should be able to find something cost effective that will resolve your issue.

Even better idea:

Go to Low End Box and browse through hosts. Each one in the comments section will have a 10/100MB test file from one of their servers. As a bonus it will also tell you the geographic location of each server.

And nobody is a "minor player" with something so complex as Xen

There are hundreds, probably thousands, of "minor players". Just look at something like http://lowendbox.com/ or WebHostingTalk. Most of them use OpenVZ because it has less overhead, but Xen is still pretty common as it has fewer limitations (like you can load whichever module you want).

You can spin up your own Tor exit node in Austria here: http://lowendbox.com/tag/austria/

Or, if you prefer, you can just donate to people that are running nodes here: https://www.torproject.org/docs/faq#RelayDonations

The landscape has changed. VPS used to have a large additional cost compared to shared hosting. This effectively limited smaller budgets to the web programming languages the shared hosting provider supported - mostly PHP. VPS is now as cheap as shared hosting:
Digital Ocean VPS starts at $5/month
Linode VPS starts at $10/month
There are even sites dedicated to just cataloging inexpensive VPS hosting
Personally, I just started using Digital Ocean on the $5 month plan; just the low latency of their VPS makes it a big step up from my prior shared hosting provider (Bluehost), despite the same cost.

I think you can get a better deal.

http://www.lowendbox.com/

For eg, I have a box from stormvz.com/vps.html and I get a box comparable with the one in the article for £4.25/month.

Strawman argument. The US has a $3.7 TRILLION manufacturing sector and it is growing. Just in case that isn't clear, measured by value the US has manufactures more than any other country in the world by a wide margin.

Google does not seem to agree. Even if it's true in some sense surely that's because the same product gets a higher value coming out of a US factory gate than it would from a Chinese one. Can someone who seriously understands these things look up "Phantom GDP Growth" which was first covered in Businessweek and give us some real way to understand these numbers in terms of actual products produced?

At this point low end box is probably the friend you need.

I've been using a VPS for $3/month from 123systems.net. I haven't done much with it yet, and I don't know how consistent it is, but so far I have no complaints. buyvm.net was another I was looking at that I believe has an even cheaper option ($15/yr!). Like someone else said, check out http://www.lowendbox.com/ to become informed about the options. Of course, you get only a pittance of ram/cpu for these bargain basement prices (and often limited availability -- buyvm sounds like a bit of a lottery), but it is still nice to have full control over a linux system that I can pack it up and deploy it to another linux server with more resources/consistency if/when I need to, while playing around with it for cheap now. It's also nice to have a far away offsite backup in case my city gets EMP'ed / destroyed by aliens / etc.

Also, like someone else mentioned, I have run ssh/www for about 15 years on my home ISP since whenever I got broadband with no complaints from my ISP.

OK, with the caveats that I'm not affiliated and I've owned the VPS for less than a month, so it's not my fault if they fuck up ;)

Oh, and it only has 7GB of disk. It's enough for me since I delete the stuff constantly (and with that upload speed, I always get a ratio greater than 3), but it's limited.
You can get 10GB more, but it's $3.7 per month - more than a new VPS!

So yeah, if you can live with that, they seem fine. If not, check http://www.lowendbox.com/ that's where I found them.

Finally, Netherlands for 7â ($8.7) per 3 months: https://clients.inceptionhosting.com/cart.php?a=confproduct&i=3

That's too much. Check out lowendbox and find something you like.

Since you don't need disk space, much RAM or CPU then you should be able to find something that will work for less than $20 a year. They usually come with a fair amount of bandwidth.

I'll take a guess that it will take less than a year for the total collapse of the music industry due to sales falling to near zero

In other news, VPS and VPN providers located outside of the US have a record year. Low End Box is a good place to start.

I highly doubt they would start running sessions of *nix OSes.

May I suggest getting a cheap colo and set it up for remote access? It'll probably be around the same amount a month and you'll have much more control.

You may talk to these guys for a customized hosting http://www.lowendbox.com/

Define "inexpensive". Linode are very good in my experience, but some would not call them inexpensive.

Look at http://www.lowendbox.com/ for some very cheap low-but-fine-for-many-things options, though don't just get one. I have a three of cheap VPSs doing various little things. That are of order of 512Mb RAM (one 1024Mb, always look at the guaranteed memory rather than any burst option when looking at OVZ options), 40Gb disk, 500-1000G bandwidth (though I don't use most of that of that most of the time) and they weight in at less than $20/month in total. But while they are reliable and fast enough for what I ask, I don't entirely trust any of them (at that price there can't be much margin, and many cheap VPS providers go under with little notice) everything is on at least two of them and backup up here so I can switch over with nothing but DNS changes if one host should die.

You'll get much better customer service response from the likes of Linode, and much less contended outgoing bandwidth and contended I/O, but depending on your needs the cheaper options may offer better value.

Now one has mentioned a good source of low cost VPSs - http://www.lowendbox.com/ Lots of providers, specials, etc. etc. However, the trick is to avoid a provider that gets listed in the "Dead Pool".

I'm with ARP too. They're excellent. The offering is good and the service is great. I'm not changing any time soon as I've already tried Linode,VPSLink and a couple of others. A big reason for going with ARP is if you care about IPv6, good network (peers, and good APAC service). You have complete control over your OS as they run KVM virtualisation.

The IRC channel is great too and you can chat with the guys who run the servers and some pretty knowledgeable customers. There's a few names in the IRC you may recognise too. The only downside I can see is that their provisioning process is definitely handled manually instead of a fully automated system that can pop out a new VPS in 30 seconds - so if you're used to that you may be annoyed. It's not that slow, and if you're in the USA you're in the right timezone at least.

I'm running 768 MB, 20 GB, 400 GB USD $20/month and I've been with them about a year and a half.

A site you may want to browse is http://www.lowendbox.com/ as they get some good deals from satisfactory providers.

Memory pigs like wordpress eat like 64MB of memory before you even get to plugins

I think you may be exaggerating a bit, given that some people run WP blogs on VPSes with only 64MB of total system memory.

http://www.lowendbox.com/

I've noticed a lot of VPS providers charge almost nothing for processor time and RAM, but disk is still pretty expensive.

A cheap VPS provider will have "fair use" policies, officially or otherwise (in fact any VPS provider, though good ones are more likely to have well documented policies so you know what standard you are to be judged against). If your VM uses too much CPU time you will find it disabled without warning until you beg to have it turned back on again. The same goes for if you create a lot of I/O activity (i.e. any heavy database work).

You don't have to break your quotas either: I've have a cheap VPS provider cut me off for "to much bandwidth use in a day" when the amount of bandwidth used in the the day in questino was noticably less than "the amount I was supposed to be allowed in a month" divided by 31.

Also, the cheaper the offer the more chance there is that the host machiens will be massively oversold, so you have so many other VMs on the host your's is on that there is so much competition for I/O bandwidth that any disk operation will take much longer than you'd expect to complete. A cheap provider might have tens of VMs all using the one single spinning-metal based SATA drive.

I still have a couple of cheap VPSs that I use for various bits and bobs so if you find reasonable ones all can be fine - they certainly have thier place but be aware of the possible problems. I never have anything hosted on just one of them, so if one goes down or slows to a crawl all I have to do is switch some DNS entries and another takes over. Also, if looking ay OpenVZ never judge a VPS by its "burstable" memory allocation. If you need the memory you need the memory. A fair proportion of the not-the-cheapest-of-the-cheap hosts have stopped offering burstable memory. (swap on Xen is different as you can always allocate the full amount if you need to, but with OpenVZ with burst enabled you don't know until you try which makes some things fall over regularly - apparently Java based apps of any significant size are generaly not happy in such situations for instance, and I've seen rtorrent fall over when there is a suddern glut of incoming data and it hsan't been told to artificially reign in its memory use)

http://www.webhosttingtalk.com/ is a good place to look for hosting information generally, and http://www.lowendbox.com/ is a useful resource if you are looking at the lowest end of the market without wanting to consider shared hosting. If you don't mind signing up for 6 or more months rather than a rolling monthly contract you might find so very reasonable dedicated server offers like those at http://www.kimsufi.co.uk/ (as with a cheap VPS, consider what options you lose by giong cheap such as support and SLAs), again http://www.webhosttingtalk.com/ is a good place to look for offers and discussion. Amazon's free tier (http://aws.amazon.com/free/) may also be worth looking at - you may find that much more stable and less over-sold than a cheap VPS.

Go to http://www.lowendbox.com/ 20 dollars is a rip-off. For just a proxy you should be able to get away with bugger all RAM and storage. Transfer speed might be a bit slow though 10Mbps wont cut it for streaming.

I don't think there's a single-host solution. For reliability: go with http://pair.net/. For control: get a virtual server. I use http://prgmr.com/ and am extremely satisfied - they're cheap, responsive, and the technical support is excellent. They're also nice, honest people. See http://lowendbox.com/ for more options. For storage, backups, and data transfer: go with someplace like http://dreamhost.com/. If you need more than one of the above, go with more than one host. For example, start with Prgmr.com (or Pair) and your site there, and when you need more disk space or bandwidth get a Dreamhost account. Then store your images and site backups at Dh while keeping your code and frontend at Prgmr.

LowEndBox is a great website that compares low-end virtual private server providers.

None of the other posters (that I've seen at least) have recommended that you upgrade the hard disk. You absolutely can. It will be some work but it will be worth it. A multi-gigabyte hard disk will make your system a lot more useful.

Filesystem Size Used Avail Use% Mounted on /dev/hda3 2.2G 913M 1.2G 44% / /dev/hda1 89M 85M 0 100% /boot /dev/sda1 3.8G 1.8G 1.9G 49% /usr /dev/hdb1 1.4G 222M 1.1G 17% /var /dev/hdb2 1.6G 374M 1.2G 25% /home

That's from my 486sx25 with 32 MB of RAM. No X, though. And not a laptop.

Just remember that you need a /boot partition if your machine can't natively see large hard disks. My machine choked hard on the 2.2G IDE drive I put into it, so a 100-megabyte /boot solved the problem nicely.

Maximize the RAM. This will help too. Unfortunately 32 MB is the maximum mine will take. (In theory it might take more; there are larger 30-pin SIMMs than I'm using now, but my machine wasn't built for them, so I haven't bothered trying them. They might work but they would probably be a waste of money.)

This is a waste of time. Some wastes of time are still fun. If it entertains you to do this, do it. I keep my 486 running out of nostalgia only (it was my first *nix box).

Incidentally if you want some low-end box projects, check out http://www.lowendbox.com/wiki ... the author is really interested in very modest VPSes (sub-$5 a month for many) but the principles would apply to modest whole-computer systems too. I put lighttpd on my 486 out of inspiration from that wiki.