Tuning for better I/O

Yes you're sharing the physical hard disk with other users, if memory serves linode uses 15k rpm sas drives in raid 10 so hardware wise it's as good as it's going to get without going solid state.

Setting noatime in /etc/fstab can increase performance a bit I've also found that ext4 has performance improvements over ext3 but you have to partition the space yourself.

Disk IO does tend to be a bottle neck on all vps services if you can avoid writing to disk until you really have to, manipulate your data in memory then write when it's done.