gman complains so I'll just rattle off my take on this:
most web hosting companies need to find a way to make up for their cheap hosting prices. They assume that most people will not use up the space they have purchased. Therefore they sell more than they have.
This sometimes leads to them running out of space, if they only have a few servers, or having to move accounts around servers or having to scramble and set up a new server.
If the tech's are anything like gman, they shouldn't have a problem (as gman is a linux guru

). Most of the time the people who oversell are the "cheapest hosting available" type companies and they may just as well die.
It's sad to see that many people try to find the cheapest hosting they can, most of the time it will work out just fine, but if you are unlucky and get a crappy company overselling alot, you may have a big problem coming your way. Sometimes a little more money can get you much better service and support.
I don't agree that the picture represents overselling becuase their should be very few boxes on the cart and the owner should be trying to manage what people are taking from the cart when he has tons of people paying him money and when alot of people want more he doesn't have enough resources to deal with all of them.
I think the picture more implies that their are too much resources and not enough people using them, I think that is the Clients view on what they are getting.
btw, what do you think of my sig gman