A friend of mine is now running his site on a DreamHost Account with SS 2.2.2 and some custom fixes (described above - without cgi mode). Additionally we removed the statistic feature in SS (Google Analytics does the job perfectly) and the website loads real quick.
I am facing one problem.. When i submit a value from user defined form.. Then after that one blank page is added into the admin left menu. And that page is selected as the blank menu title.
I will have to say that I've seen dramatic speedups once I came back to DH from MediaTemple and used the FCGI option as outlined. I have probably seen a 3-5 time speed increase from MT with FCGI and trying the other options noted on both.
PS is also available which should even further speed it up. Hopefully I'll find out re that further speedup in a few days as I've signed up for it.