the tools you use depends on your own knowledge and ability. If you have some experience with *nix and web development, then you would probably see little value in a commercial backup product because all the tools you'll need are already available for free and usually built right into the OS. If you have less experience, then something which simplifies / shields the processes from the user would help, but does create overhead as you noted. If the tools are web-based, you'll start running into problems for database sizes above 64MB or 128MB or so even if you're not on shared hosting.
Anyway, to address your question about DH, I'm of the opinion that in general, DH is one of the more permissive hosts. I've been looking into this lately and when you look deeply into 'unlimited' hosts, you'll find restrictions that DH doesn't impose, at least not explicitly. For example, in addition to limiting the amount of CPU time you can use (as all, including DH, do), some will also limit the number of scripts that can be run per hour and per day. So even if your script is super-duper efficient and fast and uses almost no RAM or CPU time, once you exceed a certain number, you'll be punished. In fact, I'm pretty sure that I read one TOS that stated script execution times over 2 seconds would result in instant termination of your account with no refund and no questions asked!
The biggest reason I'm still with DH after almost three years is because I can't find any alternative for roughly the same price that offers the same or better resource allowances. There might be hosts with better uptime, but they tend to be more expensive.