I belive I saw some posts on webhostingtalk or some other forums that stated, that their method of operations is to buy tons of hardware - single platform (mobo) that they build their offering on - with greatly discounted prices from manufacturer. They will provide it for a year or so, and then they will create new platform again after a while after they are out of stock, this happens once every year I think. Also keep in mind those are not "server grade" components so don't count on expansions to the servers/ECC RAM - this kind of stuff - you want to scale - just buy more boxes, there are upgrade possibilities, but they are limited to my understanding.

It's a promo offer, they will only offer a limited number of them, and in few months introduce a better one.

Also I've been given faulty hardware at Hetzner and the support was quite ass-hatty. I said fuck it, replace the drive and reflash the OS, but they no, the RAID must rebuild. At the end of day, MySQL was still crashing under a heavy load, but that could have been software problem, not sure if I can blame Hetzner. What I didn't like, if you open the contract eg on 15th, then cancel a month ahead, eg on 10th, they will still bill you till the end of the month, 15 more days. They're still one of the best non cloud hosts though.

edit: now I remember - they actually insisted on the faulty drive (that I reported based on mdstat logs) to be hardware-checked in the machine while the machine is offline. Mind you, this drive was faulty from the get go.

As long as the price > operating cost, they'll eventually make money on it. You could say that they take a different approach to say Rackspace or Softlayer which try to recoup the initial investment during the first month.

I'm gona take a wild stab in the dark and say megaupload has freed a lot of servers lol.