In reply to:
You've described the chain of events that led me to leave Lunarpages also.
It's got to be difficult to have a relationship with a host you have enjoyed deteriorate to the point where you feel you need to leave.
I became aware of the "custom error pages fiasco" while doing some development work on behalf of a Lunarpages customer.
I'll admit that I was pretty shocked when I saw what they had done (after borking a url), and I went to the read the whole Lunarpages TOS. Wow. Frankly, it's a TOS I could not agree to, and not soley because of the error page issue (though that *is* a huge problem with me).
Sections 6.1 and 6.2 (under section 6 "6 OWNERSHIP OF INTELLECTUAL PROPERTY; CONFIDENTIALITY") are also absurd.
Read literally, 6.1 precludes you from allowing access to the services to a developer you hire to help you ("You further agree not to provide access to the Lunarpages services to any third party.")
6.1 also could be construed to prevent you from sharing "workaround", 'methodolgoes for using the service, and "fixes" with others (" Any and all right or title to any engineering, coding, programming or customer service work around or other modification of the Lunarpages service shall also remain the sole property or Lunarpages.")
6.2 is just as onerous, in my opinion:
"...you may have access to certain information and materials relating to the Lunarpages business, customers, software technology and marketing which Lunarpages treats as confidential (hereinafter "Confidential Information"). You agree to at all times during the term of this agreement and otherwise as set forth herein: (i) hold in confidence, and not disclose or reveal to any person or entity, any "Confidential Information" without the express prior written consent of Lunarpages; and (ii) not use or disclose any of the "Confidential Information" for any purpose at any time, other than pursuant to your rights under this agreement for the purpose intended."
This puts the burden on *you* to determine what information "Lunarpages treats as confidential (hereinafter "Confidential Information).", as it is not specified what, precisely that information is. To my way of thinking, any information they allow a customer to have is, by its very nature, *not* "confidential". And get this part: those "restrictions" (whatever they may be, outlive your association with the service - "These obligations shall continue indefinitely for so long as the Confidential Information is a trade secret under applicable law and shall continue for three (3) years following termination of this Agreement with respect to Confidential Information, which does not rise to the level of a trade secret." Really! Trying to suppress free discussion of an ex-customer's experiences with the service here, are we?
Section 9.1 (under "9.0 INFORMATION USAGE AND COMMUNICATIONS") is way too broad for me; I'd like to see *some* qualification as regarding the circumstances under which they can share my information ("including but not limited to your account information, dates of service, billing address, billing records, usage statistics, site statistics, services purchased, domain name purchases, correspondence to or from Lunarpages concerning you or your account, or other information which in Lunarpages sole judgment is reasonable"). Wow. The rest of the verbiage makes it clear they can release whatever information they want to whomever they want for any reason they want. Hey, it's their right to do business the way they want, and at least they are honest about it, but I could never go for that.
In reply to:
It wasn't an easy decision, since my current contract ends in July next year.
Actually, from the way I read their TOS, they claim that *much* of your "contract" might last a lot longer! 
"11 SURVIVAL
Sections 1, 3 through 6, 8, 9, 10, 12, 13, and 15 through 21, inclusive, of this agreement shall survive the termination of this agreement and shall remain in full force and effect after any such termination. "
I'm wondering if they used the same legal counsel to prepare their TOS as they use for certain other legal work? I see what looks to me to be a lot of the same thinking evidenced in their TOS as was evidenced by another recent "brilliant" legal tactic ("The Gloves Are Off").
At any rate, welcome to DreamHost, and to these forums!
--rlparker