The $3 VMs are different from the cloud instances. You get local storage with the $3 VMs which work great, while the cloud instances have some weird Ceph cluster that is making problems all the time. So the $3 VMs are way better than the regular, expensive cloud instances.

I was planning to use one for a side project. Can you give a link where they say that?

I have one for a few months and according to htop, the VM is up and running for over 90 days.

Sure, below is a link to some unhappy users posts. If you look on LowEndTalk, people commonly discuss how sub-10MB/s disk IO on the VPS SSD 1 plan is common, and many use these as cheap Tor relays, as OVH does not care what users do.

I'd rather something like ImpactVPS or Linode, as with either I know things will be decently managed, unlike OVH. Don't get me wrong, those VPSes make great dev boxes or Tor relays, they just have no performance or reliability guarantees AT ALL! Do not risk your business on them, spend a few minutes to find either a smaller provider with good management (generally at the same price point or lower), or pay up for Linode or AWS.

Link: http://www.webhostingtalk.com/showthread.php?t=1470503

I've been using one for a side project for a while and they're perfectly fine if you're ok with one core and 2gb of memory.