Ways to promote your hosting business?

There are actually many ways. Examples are blogging and telemarketing. Advertising in social networking sites like Facebook, Twitter, Myspace, etc.
 
Communication with clients, twitter, facebook, myspace, forums (Such as web hosting community forums and development), partnerships, blogging, and so much more.
 
If you dont have a huge budget to dedicate to advertising. I would recommend advertising on blogs and forums. Customers are always looking in these places.
 
Before you do advertising of any kind, take a ruthlessly honest look at your site, and make sure it is ready to convert prospects in to clients.

The good news is that the vast majority of hosting company sales sites really don't seem to understand or care about conversion, and thus there is still a real opportunity for those that do.

Briefly, to convert a prospect, you need to earn trust, and that is best accomplished over time. Thus, the number one goal of the landing page for your ads (doesn't have to be your home page) should be to invite prospects on to a mailing list so you have permission to keep talking to them.

If you don't do this, the chances are quite excellent that the vast majority of your prospects will scroll around your site for a minute, realize it is almost exactly like the last 34 hosting company sites they've seen, and then wander off, never to be seen again. The Net is a very distracting place, don't count on prospects remembering your site.

Again, a big majority of your competitors won't take conversions and list building seriously, so if you do, you've got a shot.
 
Have you ever thought of guest posting on blogs? Or perhaps interviews, I know the owner of host gator does interviews for the websites of people that use his services. Maybe start an affiliate program where you pay people to advertise for you.
 
Participation in webhosting discussion forums, commenting on others blogs, submitting your site to directories, local marketing, and word of mouth are the some good ways to market your webhosting site.
 
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