I would start out on a reseller account. It's a painful process, paying over the odds for space, not having total control of the server and so forth but if things go wrong, you have someone to go to.
Dedicated, you are generally on your own without a management package, and even those aren't guaranteed. However, if you have experience with servers and have already gotten a customer base together dedicated is the way to go. Far more powerful, far more options and much more cost effective.
Having hosted people on reseller, dedicated and colocation, I would say that Reseller > Dedicated > Colo is the way to go.
John
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