BuddyPress.org

It really depends not on the amount of blogs you are running, but rather server activity. 1 busy blog can pump out more activity than 100 “somewhat” busy blogs. I like slicehost as well, but you become the admin (non-managed). Really, either MT or slicehost allows you to “upgrade” to larger resources when needed, so start small on either one and upgrade as needed.

Trent