We're in the process of accelerating creation of hosting packages for dynamic web sites running ASP.Net 2.0 (and optionally SQL Server 2005), and work with several hosters in France to make these packages really low-cost.
Most of these hosters give provisioning tools for customers to create files, directories, web directories, subdomains, and we generally run simple tests to assess the environment works well, and offer a good protection level for the sites.
For hosters offering SWsoft's latest 8.1 version of Plesk on Windows, there's a currently a blocking factor that users must be aware of, related to default permission on App_Data directory that's created automatically when making a "physically hosted" subdomain (i.e. not just a web dir pointing on some existing file directory, a complete sub-environment that mimics the domain itself): the permission for Network Service to write in this App_Data, and to read attributes on upper levels of directories is not set. Hence, a nice standard web application like the "My Web Pages Starter Kit", designed to run in medium trust, fails miserably with a "Server Error in '/' Application" when starting for the first time, just after uploading the files by FTP or other means. The Exception Details are somehow cryptic, System.Security.SecurityException: Request for the permission of type 'System.Security.Permissions.FileIOPermission, mscorlib, Version=220.127.116.11, Culture=neutral, PublicKeyToken=b77a5c561934e089' failed.
We're working with the hosters, and escalated the problem to SWsoft for a possible resolution of this non-propagation of permissions. Stay tuned !
Note: this new starter kit does not use SQL Server, and stores data via custom XML providers. It is published with source code at Microsoft CodePlex repository, the link to current build 1.1.0 is here.