vbseo and hostgator

Is anyone using hostgator VPS to host their vbulletin+vbseo site?

I keep getting this error (I am on a VPS):
MySQL Error : MySQL server has gone away
Error Number : 2006

I don't want to upgrade to a dedicated as its much more expensive. I am not sure what to do. VBSEO said my server was not optimized properly but hostgator replied with the following:

"We can definitely get xCache installed and recompile php as mod_php, but please note that using xCache will mean that zend optimizer and ion cube loader will be disabled. You may want to ask your developer, or the people at vBulletin to see if those are needed in order for the script to run properly. Furthermore, I see that you host about 78 domains on this container, which can work, but if you are planning on running a bulletin board with a lot of users who visit the site simultaneous, you may want to consider upgrading to a dedicated server. Caching modules, such as xCache, will work better on a dedicated environment, as it will have more resources to pull from for caching. Although we cannot guarantee that installing xCache and switching to mod_php will help your performance on the server, we will be happy to do so. Please let us know if you would like us to proceed. "

PS - I don't really have 78 domains on there, they must be counting all the domains on the server. I also have a script on there running zend so I can't have it disabled.

Any suggestions?

gone_away errors relate directly to the wait_timeout setting in /etc/my.cnf Try 180 as an initial setting.

Using mod php (DSO) is at least 10x faster than php as a cgi and i highly recommend switching to it.

Neither vb nor modern versions of vbseo require ioncude or zend.

xcache can make an improvement if you have extra ram to use to store the cached data.

I am also running phpmydirectory which is why I need ioncube.

Any idea on what type of ram would be sufficient for my forum (legalhelp.org) or other server requirements?

I don't understand why installing xCache will break Zend . They should work together without an issue.