I have a feeling that perhaps some of my users download issues are being caused by CacheFly so I'm considering hosting my own files.

Users are downloading an average of 109 3MB files per day (highest this month is around 300).

Now, I'm considering either adding RAM to my current node (300MB) or getting a dedicated node specifically for file hosting and only putting lighttpd & an ftp daemon on it - nothing else.

In your opinion, what would be the best to do?

Thanks!

When it's all said and done, it's probably more economical to upgrade your current server to the next level than add ram to the current one.

You get the extra ram plus more space and bandwidth for about the same price. Linode does this on purpose to encourage upgrading and avoid different size Linodes on the same server.

Check the prices and do the math.

Not only that... with a beefier Linode account, you live on a server with much fewer users. So not only do you gain benefit of more memory, you also gain benefit of potentially lower I/O usage server-wide.