I had a Linode 512 and switched to a 2x512 Dropplet setup and put my Database on one 512 and my Rails app server on the other.
My stuff runs as quickly if not quicker and I spend $10/mo less. In addition to this I also have a clear scaling path (e.g. If my DB grows I can up it to a 1gb. If my traffic grows I can either move the app server to a 1gb or maybe get a few more 512's and setup a load balancer.)
RAM is the only thing that I feel Linode is lacking as of late.
It took me a fairly long time to setup the dev environment so I was a bit pissed.
I do this with Linode stackscripts, and I couldn't live without it. Unfortunately DigitalOcean don't support stackscripts as of yet. And their support didn't want to tell me if they will ever support it.
I was dubious about switching back to DigitalOcean as I was worried about how cheap they were offering packages. I bought a DigitalOcean VPS that had slightly better specs than my Linode and ran some tests. Just a few like response time on the site they were both holding, I/O and a Redis stress test and Linode seemed to come out marginally on top.