Jon Udell has a screencast of an application he wrote running on Amazon's just announced EC2 metered compute platform. According to Amazon, each instance "predictably provides the equivalent of a system with a 1.7Ghz Xeon CPU, 1.75GB of RAM, 160GB of local disk, and 250Mb/s of network bandwidth." Need more capacity? Add it right now.
I think many large IT shops will be doing similar things soon with virtualization. Rather than buying servers from Dell or someone on demand, they'll order a bunch of servers up front, have an outsourced services provide install them, and then just create virtual servers for customers and projects as needed. Much more predictable and easier on the budget.