[redrobot5050]

Make sure the client knows what they're doing with regards to a web presence: E.g. they can manage e-mail / hosting set ups. If they don't, they're likely to get burned, even with your advice.

I would advise getting a small VPS from Slicehost. Set it up so that it automatically backs up (they charge like $5/month to do machine replication, but having an always-ready-to-go daily backup of your client's machine should be a closer).

If you're going to go for old-school hobbyist shared-hosting, I'd suggest Myhosting.com or http://www.nobullshithosting.com/

I'd also advise you to stay away from Dreamhost.com. Their servers have terrible bandwidth, lose emails, and their TOS is ridiculously restrictive to the point where they can justify closing your account for any reason -- the primary one being that you're actually costing them more they're paying (e.g. using more than half the "promised" 500GBs of space their $9.99/month account gives you).