Late last week ended buying a hetzner VM (vServer vq7) mainly out of curiosity.
I'd heard a fair bit of good things about hetzner, and wanted to try them.
Fairly impressed, 30ms - 50ms latency (stable, varies from site-to-site), and they seem to be sanely installed VMs (no custom kernels etc).
Went for Debian 64-bit VM which turned out to be 5.0 (Lenny), again, out of curiosity did the upgrade process to 6.0 (Squeeze - unstable):
Modify sources.list to squeeze
apt-get remove linux-image-2.6-amd64
apt-get install linux-image-2.6-amd64
(Note: The above must be done in that order, otherwise you will hit udev/kernel bug).
Sure enough, it came back up, no problems.
Spent last couple days moving all my stats and monitoring over to the hetzner VM, pleased to take some load/work off my atom servers; and have a fourth location for DNS/backups.