Well, some good VPS solutions that allows for pain free upgrades and are really cheap are Linode and Slicehost. The problem here though is they aren't setup and forget..if they need an upgrade, you have to manually do it. However, with those 2 hosts, you order the upgrade and it is performed painlessly in less than 5 minutes. All your files will be intact.
Based on your description, though, it sounds like you want a cloud host where you can just set up the server and have it automatically scale to what you need. In that case, you'll want to check out Amazon EC2 and Amazon S3.