I have written a simple web application mostly full of static web pages with several you-tube embeddings. Few forms and so on. All this is developed using CodeIgniter.
The site is very similar to Academic Earth. With开发者_运维问答 videos served from Youtube. It has got 400 users only 30-40 are active.
I am not interested in shared hosting and want a machine with root access. My budget allows me to hire RackSpace cloud server with 256MB Ram.
Is it sufficient to run my application?
Or should this question go on ServerFault.
Yes, you can run a simple server on 256MB RAM. You would want to look at things like http://www.lighttpd.net/ instead of Apache and do some tweaking to settings (I read that Debian is better at using less RAM out-of-the-box though not sure how true that is.)
Read this: http://www.lowendbox.com/blog/yes-you-can-run-18-static-sites-on-a-64mb-link-1-vps/
I've had great success running apps on tiny VPS hosts like Slicehost and Linode.
You'll probably be fine with the apache/php/mysql from your distribution's package manager. I've had good results compiling my own AMP stack from source and tweaking things. With PHP 5.3.3, PHP-FPM (FastCGI Process Manager) is built in, and provides much better FastCGI support.
Running PHP under FastCGI can be adventageous in low-memory situations, since you can then run apache with the worker MPM, which is much more efficient, memory-wise than running prefork-apache/mod_php
Note that currently, Linode will give you a 512MB server for $20/month. However, my experience has been that Linode has semi-frequent network issues (see http://status.linode.com), but otherwise they've been great.
If all you can afford is $20/month, you probably can't do much better. The other nice thing about these VPS hosts is that if you need to grow later, all it takes is a couple of clicks in a control panel and you can upsize your server.
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