I've not heard of 1&1 offering colo services or the such. Being primerily in the dedicated and shared hosting markets.
From what I've heard, they have relatively solid facilities, but their support systems are a nightmare and getting a response during an issue can be like getting blood out of a stone apparently.
The comment I had heard about them are positive and it looks like they are pretty cost effective and reliable. However do some analysis before getting into a business agreement with them.