Hi Darcy,
I have been using Moodle for a number of years. I originally tried hosting it on my own server (a very low spec linux box) but it kept falling over once I had more than two or three users connected simultaneously.
I then tried it on a free hosting service that I was using at the time and that was okay until they decided to turn Safe Mode on by default, thus blocking sites which needed Safe Mode off, such as Moodle.
I specifically joined TCH because I knew Moodle would run on it. The creator of Moodle (Martin Dougiamas) originally hosted the Moodle website on TCH, before he set it up on his own servers.
If you do a search for TCH on the Moodle forums (http://moodle.org/course/view.php?id=5), you will find a number of posts which discuss issues that others have had with Moodle on TCH. You are correct in saying that some users have had issues, mainly in regard to "bottlenecks" in accessing the main database.
However, from my own experience, I have not had any problems with Moodle that were caused by TCH hosting.
I am currently running Moodle in a high school environment with five active courses and a total of 50 users. I usually have between 12 and 20 users logged in simultaneously.
In my previous school, I had ten active courses and over 300 active users, with up to 50 users logged in simultaneously. At least twice a year, we conducted online examinations with 50 users all doing multiple choice tests at the same time, with no issues at all.
I would suggest that Moodle will be just fine for what you want to do.
Anyway, I hope this helps. Please feel free to contact me if you need any help in getting things up and running.
Cheers,
Dave