Should I run the bitcoin daemon on a dedicated server?

[Chick]

I don't know if this provides any more / less security, but does it really matter? All you need is the username & password to be able to do any json-rpc commands with the daemon.

Is it worth it spending some extra bucks per month to get a dedicated server for this?

[error]

You should get a dedicated server if your bitcoind is going to handle Bitcoins instead of just monitoring the block chain. A VPS may in some circumstances (i.e. security problems with the hypervisor) be exposed to other customers.