They are cheap, but they do oversell their shared hosting plans. If you need anything that requires performance or slight server customization, avoid them.
I have never dealt with a helpful tech support agent, each one just passed me onto someone else who still had no idea what they are talking about.
I guess, in short, if you want cheap, and nothing too powerful their shared hosting plans are fine. If you need some performance, go with Slicehost. Personally, after dealing with 1and1 for 3+ years I would never choose them again. I would rather spend more and go somewhere else.