I've been asked a few times to explain the differences between a DDS and a VZ, so here you go!
The difference between Windows Virtuozzo and Dynamic Dedicated Server is the difference in both the virtualization technology, which leads to a clear difference in separation between the individual virtual machines on the node and how each platform is licensed with regards to Windows.
Windows Virtuozzo uses what is called a software based virtualization technology. From a purely technical perspective, software based virtualization technologies replace expensive hardware based communication techniques with software based commands. When a virtual environment addresses the hardware (network adapter, CPU, etc) it uses a software based system to address these calls and execute commands. This can and usually does lead to a faster communications process between the virtual environment and the hardware node itself. The Virtuozzo software application layer does a great job with addressing hardware and it runs very quickly and scales well, however, it has certain disadvantages that hold it back.
One of the disadvantages of Virtuozzo is that to make it cost-effective from a provider standpoint, you must create more virtual environments per node than a hardware based solution. Also, software technologies like Virtuozzo tend to be less stable and more prone to errors as the process of addressing the hardware through an application layer like Virtuozzo can create a highly volatile situation. Virtuozzo, given that its software, also falls short in the virtual machine separation department. Too often, a single Virtual Machine on a Virtuozzo node can become detrimental to other virtual machines on the same node. Since the architecture is based around software, managing resources can become very tricky with Virtuozzo, as you have seen.
With hardware based technologies, the providers ability to scale is greatly limited. Citrix XenServer has excellent virtual machine separation, due to it being hardware based and this means more of a true dedicated server like experience for the user. What is clearly advantageous about going with a DDS solution over a dedicated server is the fact that you have many of the benefits of a VPS node (RAID, high capacity CPUs, management) and a much lower cost, compared to that of an equivalent dedicated server.
The nice thing is moving to a DDS would give you a fresh start and allow you the clear benefits you are looking for which are:
1) RAID redundancy
2) Excellent CPU and RAM separation
3) Managed Environment (we do not offer DDS products without management)
4) Stable environment
5) Low customer density environment (4-12 customers per Hostnode)
6) Dedicated server like experience
7) The ability to utilize Windows Updates
8) The ability to run VPN related services on Windows.
9) The ability to set your timezone (unavailable on Windows Virtuozzo systems)
10) The ability to have up to 8 gigs of RAM on our DDS systems. (Virtuozzo is limited to 2 gigs)
11) The ability to cluster several DDS systems together (Load Balancing and clustering, both on Linux or Windows) to power a high profile site. We're doing this right now (Windows cluster in Los Angeles, Linux cluster in New Jersey). Contact Sales to get links to the sites running on these phenomenal systems!
Everything else about Windows Virtuozzo and Citrix XenServer is the same with regards to the user experience. The only thing Citrix XenServer lacks is the Virtuozzo Power Panel interface that allows you to see resource usage, make backups, reboot your server. Citrix XenServer will act just like a dedicated server and will allow you the identical functionality.