Rackspace Cloud server is basically the same as an ordinary VPS. The only real difference seems to be richer set of options in a control panel - you can resize Rackspace Cloud server with very low downtime, you can do snapshots from a live system without stopping it and you can deploy new servers very fast. Rackspace Cloud server is a Xen-based VPS under the hood.
This is common if you have a small subnet delegated from your ISP. It's called RFC 2317 delegation or something like that.
Many ISPs will have you create a PTR record, under your domain (i.e. oscar.com which you have control over), and put a CNAME in their reverse zone (i.e. 0.168.192.in-addr.arpa which the ISP has control over).
For example, for an IP address of 221.222.223.15, the reverse record would be 15.223.222.221.in-addr.arpa. A reverse lookup would look for that record from the owner of the IP address (in your case, myhosting.com or their parent ISP).
The ISP would normally have a record like
15.223.222.221.in-addr.arpa IN PTR net223ip15.myhosting.com
But in the cname delegation method, they have something like this:
15.223.222.221.in-addr.arpa IN CNAME 15.oscar.223.222.221.oscar.com
Then you create a record in your zone like this:
15.oscar.223.222.221.oscar.com IN PTR www.oscar.com
Then folks will look up 221.222.223.15 and follow the CNAME from 15.223.222.221.in-addr.arpa to 15.oscar.223.222.221.oscar.com to www.oscar.com.
I've never had this done for a single IP, but I've had several ISPs do something like this for routed subnets.
Check with myhosting.com to see if they have a preference or specification for the record. But I think this is the general story behind the delegation.
Best Answer
While an EC2 instance will probabley cost you more overall, it does give you a number of options you won't get with a VPS.