Yet another server thread

I've got some server questions:
my MU installation is not yet live, it will host from a minimum of 150 to a maximum of 300/350 niche subsites about wine and gourmet products.
Actually it's hosted on a vps at (the plan is vps300, which comes with centos, whm/cpanel, and 1,5GB of guaranteed ram, 80GB of disk space, 3TB of bandwitdh).

I've already noticed that it's not really fast: when there are 3 persons on the backend doing publishing work (and I plan to have a lot of editorial work, especially on the main site) the cpu consumption seems to grow quite fast.

Also, when I contacted to do a server hardening and optimization work (they have good references on the boards of, they refused the job because, as they said, "such a wordpress installation does not belong on a vps".

I'm not yet using any caching plugin, but I planned to install wp-super-cache, even if I don't think it will be enough.

Given that I really want to provide a good service to my client and to my visitors, do you think that the best way to go is a small dedicated server?
Probably the maximum which I can afford for now is the ds100 plan (always on, I'd like to stick with them as they have a great support service), which comes with centos, cpanel/WHM, an Intel X3210 and 2GB of ram, do you think it'is good enough?

Sidenote: the network, which was already existing before, used to have 200k visitors per month, with higher spikes on some "hot" months in the year.

Thank you very much