So, Linode can be seen as less mature with their Xen setup than Slicehost. I've had no problems with either and I don't want to imply that Linode isn't reliable or anything of the sort. However, Slicehost implemented a Xen architecture about 2 years before Linode and sometimes businesses like a longer track record.
So, Slicehost became embedded in the mindset of many in the hacker community. For one, it was Xen and Xen is just better than the User Mode Linux that Linode used until recently. For two, Linode didn't always offer such a RAM advantage. When Slicehost was launched in 2006, you got a 256MB slice for $20. According to the Linode blog, they were offering 100MB for that price. It wasn't until March of 2007 that Linode equaled Slicehost with 256MB - and it was still running User Mode Linux. Part of it was right thing at the right time. Slicehost got in with Xen right as virtualization was going to take off and had a superior offering. Now, they cost a little more, but part of that is for the reputation they've built for themselves. I hope Linode starts building up their reputation now that they're Xen backed and offering a superior package per dollar and I hope that pressure from Linode will get Slicehost to offer a little more.
That's probably way more of an explanation than you wanted of why Slicehost holds the position it does in the hacker community.