I will have to admit that I thought for a while that HostMySite was overselling by allocating 20GB of space on the Linux Builder plan. Apparently I was wrong. The other day, a friend's site incurred an infinite loop several times, creating 100's of thousands of database queries. Since Rails in development mode logs every database query, the resulting logfile was 20 GB (at which point the quota was reached). HMS did not limit uploads until the 20 GB was reached. So clearly you can get the full 20GB if you need it without any complaints from HMS.

Good accidental test. Good to know

I think there needs to be a distinction made. There's overselling, overallocating, and a quota. What you experienced was that a quota wasn't set. You also experienced that the server wasn't overallocated. That doesn't mean there's no overselling.

Ultimately, there's overselling in all industries. If everybody used their cell phone at the exact same time (anyone in New York during the blackout a few years ago?), you wouldn't be able to make a call. If everyone withdrew all their $ from the bank at the same time, you wouldn't be able to. Virtually every industry has overselling to some point, and web hosting is no different. You wouldn't be able to afford a shared hosting account if it wasn't oversold at all. The key is whether or not the disk space is monitored, and whether there's a really strategy in place that can react if disk usage gets close. Both of these IMO hostmysite does well, certainly better than other hosts I have seen.