Yes, each domain (or sub-domain) hosted at DreamHost has its own publicly accessible web-directory, mailboxes etc. and each is independent of the others.
I can only speak from personal experience, but I have been very happy with the overall speed and uptime since I have been with DreamHost. The few outages I do notice are very short in duration and my sites are generally back up before I can lodge a support request.
One thing worth noting; At DreamHost your MySQL databases will not be on the same physical server as your website, this can cause a little extra latency, but this doesn't appear to noticeably affect the speed of my sites.
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