1) Would hourly billing attract a different kind of usage pattern than what Linodes have so far been used for?
2) Will this hurt performance for other customers?
The reason I'm curious about this is that even the cheapest Linode comes with a lot of CPU power, especially compared to EC2. But the CPU is not dedicated, in fact it's massively oversold. This is great for people who occasionally need to use 8 cores but stay relatively idle most of the time. Guess what, if you keep a server online for months, it's going to be idle a lof of the time.
Hourly billing, on the other hand, encourages people to fire up an instance, compute whatever they need to compute as quickly as possible, and shut down the instance as soon as they're done. In fact, that's exactly how I use EC2's high-CPU instances. Everything is scripted to ensure the most efficient use of resources throughout the lifetime of the instance, because every hour costs money. Why use 50% CPU for two hours when you can use 100% CPU for one hour for half the cost?
This kind of usage pattern, if widespread among customers, can lead to higher overall CPU usage on the host node (as well as of other scarce resources such as I/O), because fewer instances will sit idle. With EC2 this is not a problem AFAIK because the CPUs are dedicated to my instance. But Linode's CPUs are shared.
For a "traditional" Linode customer, the implication is that there will be busier neighbors. Officially, of course, you would never get less resources than a fair share of the host node. But it has usually been the case that, in Linode, you get a lot more resources most of the time. If people can no longer rely on this unofficial assumption, there could be trouble ahead for Linode.