I had no problem cancelling my hosting account with 1and1. I had a problem with the prorated refund going to a Paypal address I no longer owned, due to selling the site.
Anyway, 1and1's shared hosting, with its limitations on database size, was overall very good, fast and stable, compared with the other big hosting companies.
There's much talk about smaller companies being more flexible, keeping their servers more lightly loaded etc., and I believe there's some truth into that. I also believe that they're generally more poorly equipped to handle certain situations. I won't even consider real disasters, but mundane things like 2 out of the say 3 people that form a small hosting company being severely affected by the flu, and a server having a hard drive malfunction while they're bedridden. Support will suffer, and hopefully the 1 remaining able tech will be the technical wizard of the 3 (usually they're not all equally talented).
My take about your hosting situation: if it ain't broke yet, don't fix it. Keep backups ready, have a hosting company name or two to move to jotted down, just in case. Have some money on your card/paypal.