I might have to provide some small financial applications to a company next year and I'm trying to flush out how I'd do it.

My main question is "which is better?"

1. paying a hosting company for just a straight linux box and doing all the install, setup, and management of JBoss and MySQL myself
2. Paying a hosting company to do everything needed for a managed web hosting service with a full j2ee stack

I'm guessing to answer the main question I have to answer a few sub questions first. Like are there any reputable companies that actually do #2?
Seen eApps but still trying to find some actual users reporting on it
Seen A2 hosting actually recommended but it doesn't look like they have app services outside of Ruby

My main concerns are these:

1. cost
2. security(its a financial app so...)
3. backup capability
4. companies reputation and customer service

I'm very new to this so I'm sure there are many aspects I haven't thought of. Please feel free to bash me

Anyone have any ideas?

Thanks in advance,

which is "better" depends entirely on your requirements and expertise.
If you lack a team of sysadmins with strong Linux and JEE maintenance skills, option 2 is definitely to be preferred.
If you do have such people, option 1 is the more flexible one, but there's noone to blame but yourself if your site goes down unless it's a power failure.

There is of course a 3rd option, if you are thinking really serious work, and that's cohosting, putting your own machine into their hosting center where you maintain it, with the hosting company only providing networking, power, airconditioning, and physical security.