Running Friendica on a Virtual Private Server (VPS) may initially require more work and expertise than installing on a shared host. The plus side is that compatibility issues almost never occur if your server OS is Linux - and you have considerably more control over the environment, too. For instance, that makes it much easier to use the server for other applications and projects alongside Friendica.
That said, it's worth repeating: If you have never worked with Linux before and Friendica is the first thing you have ever installed on a server, you are probably best advised to use a shared host or the Virtual Box image (see here: http://friendica.com/download ).
Here are links to some VPS providers that users have reported as reasonably priced and reliable (prices and exchange rates cited for May 2012):
- https://www.fitvps.com/ - $6/month (inc. VAT)
- http://www.b2vps.com/ - $9.95/month
- http://strato.de - €7.90 (~$10.40)/month
- http://greenqloud.com - $11/month
- http://www.greatnet.de – €9.99 (~$13)/month
- http://hosteurope.de - €12.99 (~$17.10)/month
And this site specializes in finding and listing cheap offers: