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I wouldn't jump to Linode not being a suitable host -- this thread reads to me as just needing configuration optimization and lot of elbow grease figuring out why PostgreSQL is eating that query. A lot of people run very large databases, regardless of RDBMS, successfully on Linode and with no trouble.
Database tuning is simply an inexact science -- this is an old thread, too, and the OP may have resolved his issue by now.
_________________ Disclaimer: I am no longer employed by Linode; opinions are my own alone.
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