This is the current response time of a WordPress blog on Dreamhost:
Wordpress is a database-powered PHP application, so this response time includes the MySQL queries and PHP overhead.
The major improvement you see around Sept 21 is my installation of WP-Cache. In any case, the average response time is now just below 1 second. When I try to factor out the PHP/MySQL influence by measuring the mere download of a static file, the results are:
That is 350ms on average. In the bad days (back in September 2006) this could be above 1 second.