I've used them and didn't have a problem until I wanted to transfer to another domain registar. After painfully trying to find the transfer auth code and transferring the domain name, 1and1 continued to bill me for a couple of months. To their credit, they reversed the charges after I called them - but that didn't leave me with a satisfactory experience.
I can understand why a company might want to make it painful to leave their service, but continuing to bill me points to either incompetence (some bugs in their billing system) or a malicious act (doubt it though).
But otherwise, yea, a nice & cheap service.