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Rackspace is pretty pricey.
Are you just doing transactions or are you offering downloadable goods.
If just transactions then Rackspace will be overkill to start with.
If you want the security of a dedicated server then look at 1&1. You can get a managed dedicated for ~$100 per month that will probably be overkill.
I have 4 dedicated servers and a couple of VPS's spread over a couple of different ISP's all doing Ecomm.
You are concerned about 4 things, bandwidth, security, monitoring and flexibility.
I would get a managed Linux box.
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