Re: Recommended number of Mongrel instances
imho, the first order of the day would be to replace apache with nginx. i did that with my 256 slice with 4 nginx workers (4 is recommended for slicehost) and things are snappier now/i don't go over my 256MB. i also have 3 mongrel instances, which from the forums, seems to be the sweet spot for 256MB slices. oh, and if you're not using innodb, you can turn that off as well - my MySQL usage went down from 11% to 4%.
On my new slice I went from apache to nginx with 4 workers, and It really does save memory usage. Works great as well. I couldn't recommend it more. Also if anyone needs help setting it up just search for the slicehost article repository.