Reliability is the key feature you should use in making your decision.
It doesn't matter what type of encryption or IP address switching or backbone connection the company has if it is flakey. Yes, you can temporarily redirect your connection directly through your ISP when the VPN company is offline or too slow, but that is a royal PITA, and you HAVE to remember to re-set it up later (and hope that the VPN company is back online by then). It's just too much of a hassle, if not danger, to be worth it.
You really want to go with a company that owns its own equipment and backbone connections - and has the money to upgrade them as their client base grows. University test sites and small garage companies that rent servers and network connections might be OK to give the idea a try, but when it comes to paying $$$ for a service, we strongly recommend spending your money on one of the major players.
As we mentioned above, make sure the company is big enough to support their client load, especially at the 4-9PM timeframe. If you get a trial account, make sure you give it a good workout at this time of day to see how it performs for you.
You also need to be careful about who you try even during your trials. There are scammers in Russia and the Far East who set up fake Proxy Server and VPN companies simply to gain your trust so you will funnel your traffic through them - giving them free reign to steal your info as it passes through your server. Most of these "companies" pop up and close shop within 2 or 3 months, so if you can't find any reviews older than 3 months on a company, don't use them even for testing.
When it comes to levels of encryption, there are really 2 levels: Level 1 is PPTP and Level 2 is OpenVPN SSL, SSTP, or IPSEC.
PPTP is simple, older, and is pre-installed on nearly all modern operating systems. It has less overhead so it is better for older computers, and on smartphones, and usually requires going through a number of networks configuration pages in the OS control panel. PPTP is not easily set up on Linux machines. PPTP it is more hack-able, so you really need to use long passwords (if the VPN even lets you assign the password) to be protected. PPTP VPN connections may not be able to get past some routers.
L2TP/IPSEC is more secure that PPTP and is available on nearly all platforms including Linux and smartphones. Unfortunately, for most computers is also generates more overhead, so it is not ideal for slower computers. It is a bit better than PPTP at getting through most routers, but it uses the TCP protocol for the encryption overhead, which sometimes makes it prone to time out and lose connection. Windows setup requires working through numerous network settings pages, and for one provider even requires Registry changes.
SSTP is a relatively new VPN approach developed by Microsoft, and is available in Windows since Vista. It is similar to L2TP in design, although a bit more transparent to routers. It is available on Microsoft products only.
OpenVPN/SSL is much more secure that PPTP and requires less overhead than L2TP/IPSec, but is not pre-installed on Windows computers - users must install an additional driver. It is quite transparent to routers, and uses UDP for encryption overhead making it less susceptible to timeout errors. We like the fact that it is an easily managed download that only requires filling in a few fields on an install screen, and for most providers includes a simple on-off switch to activate / deactivate it. OpenVPN is generally not available on smartphones.
It is also possible to use basic SSL encryption for a VPN, but it is typically limited to protecting web browsing only. Connections for peer-to-peer and other non-web traffic usually by-pass any basic SSL VPN's you may have set up.
Make sure it is a REAL VPN service, using at least PPTP, and preferrably OpenVPN. If they only reference SSL, they aren't a true VPN service - they are probably simply offering a Proxy Server with basic SSL coverage. If they only talk about how it works while web surfing, you're not getting the real deal.
Server Locations and IP Address Handling
Check to see where their servers are. Some European providers do not offer any US servers, so if you are in the US your traffic must go overseas twice to reach a US web server or torrent partner. The reverse is true if you're connecting from Europe or the far east - make sure their are servers close you you.
Many services offer IP address cycling. This is a neat feature that keeps destination sites from purposely blocking traffic that comes from VPN connections. But be sure that this is an option you can turn off when you want - some destination websites require that you maintain the same IP address throughout your session - otherwise they make you re-log on with each new page load.
Additional Features you may want to look for or add to your account:
A service that filters through the traffic you generate to remove or hide more of your identity. (We aren't crazy about this feature, as we don't think it wise for anyone, even the VPN company to be reading and changing the data we are transmitting)
Generation of fake cookies that let you stay logged on to sites that require cookies to go from page to page, and then throw those cookies away when you log off the VPN. (This is a good feature, although it can cause problems with activities like Internet Banking, etc).
Strong support for interactive environments like Flash and Java. Some very simple VPN services cause problems with the two-way flow of data needed on some websites.
Support for the types of data you plan to use - Most low cost or free VPN's do not pass through any kind of video or file attachments. Some even block out pictures so you only get text. All but the top tier restrict use of their system for heavy-bandwidth activities like media streaming or file sharing.
Support for data pass-through of all ports (TCP and UDP). This is important if you do any kind of gaming (MMO's) or file sharing.
Firewall / NAT protection - Because using a VPN flows data unimpeded through your in-home router, your computer is exposed to the hack attempts of the rest of the world. Your PC's internal firewall will deflect (hopefully) these attacks, but it will slow down your computer enormously as it spends processing power evaluating and responding to each threat. Some VPN services offer a server-side router-equivalent that provides the same protections your in-home router provided before you started using VPN. We consider this a valuable service, particularly if you use any file sharing software which purposely exposes your IP address even to persons you are not sharing with.