The service we used was pretty good. We got a single WSS team site which we could edit as we pleased. But there were a number of hard lessons learned:
Don't assume anything
Ask you Cloud provider ever question you can imagine. Many of these services provide you a control panel that gives you very limited or bespoke functions. Be sure you have a SharePoint expert go over every step of creating a site to be sure you understand how the hosting company may have altered SharePoint.
Ask about mail notification
Our business requirements had mail notifications as a nice to have. Turned out the hosting company we had didn't even provide this as a possibility. Be sure that you ask if a SMTP server will be provided for mail notification and transactions.
Review the process for adding users to the AD
We had used the service for years as a WSS 2.0 implementation and requested a new WSS 3.0 site to replace the WSS 2.0 site. We had not thought to ask how a new site would authenticate, and it turned out the only way we could add users to the new site was via a control panel, which only allowed one entry at a time. With about 1,000 users this was a time consuming process involving filling out a series of forms for each user.
Understand what space limitations mean
Our provider promised a certain number of Gbs of storage. Lucky when we asked they assured us that it mean total documents not total database storage. If you buy 100 GB of total Database storage you may end up getting only 25 GB of database storage.
Check every site setting function
Likely there will be limits to the templates you can install, or the themes you can add. You should check with your hosting firm on everything you can add and edit, including master pages, layouts, templates, and even sub sites.
Confirm patch application procedures
It is worth knowing how patches are applied to the Cloud site. Patches should be pre-tested by the hosting firm before applied, but don't assume this will be the case.