Wow, I got that same email.
I once had a YaBB forum on my Xilo account - out of the blue they decided, due to security issues - YaBB forums were no longer allowed, and I was issued with a "breach of terms of service" warning without any explanation.
It looks like their customer service tactics are improving.
Tetra has Jmbarrie's website hosted there, he reccommended Xilo, and tbh they seem to take security seriously. this is the second thing they pulled the plug on since we have been there to be honest, the first one was fantastico, the second is Front page extensions.
I hae to admit that I really like Xilo, the host is really fast and my support tickets are usually answered within minutes, Tetra told me that technically they even went as far as helping him to debug his pearl scripts. I'd reccommend them to anyone, they are a real breath of fresh air compared to hostcrappa.
Uptime has been 100% since we've been there as far as I know.
Do you have Barcode Battler hosted there?