The issue here is with the wording in the "Unlimited" policy. What is prohibited is "Making your account resources available (whether for free or pay) to the general public. "
You are allowed to provide webhosting to your established clients, you just can't resell webhosting to the public in a way that competes with our own offerings. The key here is some added value (you manage the site, do the site design, etc.) where you in some way are invested in the operation of the site.
This is, as a practical matter, required anytime you want to host someone's site on your account. If you don't do this, your account won't last long as some idiot from the "general public" will most surely, and pretty quickly, get your account terminated for a Terms of Service violation with illegal content, spam, etc.
--DreamHost Tech Support