I hosted with 1&1 for one year and registered some domains there, and it was absolutely the worst hosting/domain experience of my life. Their servers went down often, there control panel is one of the worst in the business, their support staff consists of people who are only capable of copying and pasting from their FAQ, and they make it ridiculous to cancel/transfer anything away from them. I had to call them up about 3 times, and send five different faxes just to get them to cancel my hosting package. I would stay as far away from 1&1 as possible.
Tom