Question to users that have their own webhosting (either physical servers or are resellers):
Are there any common security issues you have to deal with on your servers? Any suggestions about troublesome things that should be disabled? Any stupid security mistakes specific to webhosting that I should avoid? Any recent vulnerabilities that are affecting webhosts?
The practice of giving user level access to anyone with a PayPal account or credit card is in and of itself insanity. I've been working in the hosting industry for the better part of the last six years and I still find it insane.
This is a list of what I do for most servers (shared or not) in no particular logical order:
Finally, last but not least:
It looks like other people are going into lots of details, however the single biggest source of malicous activity has to be FTP.
Lock it down to certain IPs, disable it for accounts that don't need it. Even disable service unless it's requested.
I've had to deal with dozens of hacks after malicious code is uploaded into websites, either spamming the world or redirecting visitors with iframe injections. Rarely do they get root or shell access, instead they just cause a ton of manual housekeeping work of un-blacklisting servers and manually searching code.
The main source of the hack isn't the server itself, but infected end-user PCs which sniff FTP passwords and send them back to the mothership, to then be used later from a different machine to upload the code.
I worked for a web hosting company for a while and it is a nightmare to keep all users secure. Specially on a shared environment. Private servers are way easier to keep track, since security issues are isolated only to that system.
Some things to keep in mind on a shared hosting:
For the private servers, you leave the security on your users hand, but make sure to install proper QOS, NIDS and anti-DOS tools on your network.