I have posted problems I have had with Totalchoicehosting and problems with server stress (database usage) in the past, but would like to follow this up after a little testing (albeit with Moodle 1.21).
I still have some installations with TCH (although our main school site is at Moodle.com).
I used the 'hidden' database performance tool within moodle (/admin/dbperformance.php) together with a Windows tool called 'Webserver Stress Tool' (the limited trial edition appears to have no time or usage restrictions) on a TCH server.
This allowed me to simulate 10 active users on the site (each with a click every 5 seconds).
When I set dbpersist = false in config.php, there was no observable effect on the number of database connections. With dbpersist = true there seemed to be an exponential increase (I had to switch the test off after 20 seconds).
I finally reduced the number of 'users' to 4 and still the number of database connections rose rapidly.
My conclusion: dbpersist = true (the default in older Moodle versiosns) is why, with a class of 28 TCH complained about excessive database connections. I suspect there would be no problem with dbpersist = false, unless this caused excessive cpu usage (but my 10 'users' didn't seem to affect the live cpu usage chart at TCH).
I might do further tests with the webstress tool on multiple PC's.
I do not know if this is an issue with the database setup at TCH, but does illustrate a major 'bottleneck' and its cure with some Moodle setups. I don't know if the same would be true with Moodle v1.4