I'm with Artashes and Steve on this - for the most part, I prefer the monthly payments (if I was paying for shared hosting)
We have a few services that we offer our clients in which we know we will continue to offer the services, so locking into a 3 year plan with OUR provider has offered significant discounts.. Sometimes reducing as much as $40,000/year in savings.
So, it depends on what the product is, who it's from, and what the longevity and lifespan of the product will be. Domain names, I don't see a reason to go on a yearly payment - lock it in for 5 or 10 years (if you know you're going to be around). Monthly fees for cPanel licenses - lock that sucker in for the year and take the discount. Shared webhosting - it depends on who you're hosting with I guess. We see many people jump at the extended years for the extra savings and additional bonuses.
Much like I don't like having a car payment each month and rather pay off in 6 month chunks, or pay the whole thing off to start with, I do the same with most of the services/products I purchase in the hosting world too. Sometimes buying those large servers upfront can save you money, other times slapping it on the credit card is a more feasable approach.