Just wondering what people look at that tells them if a hosting plan is too good to be true or not.

I think the price / bandwidth ratio is a sure sign. If price/bandwidth is lower than any /GB price available out there with leasing servers or colocating in that "area" then it is too good to be true. Mostly a rule of 5 can be used, meaning this has to be true:

bandwidth / 5 < price

ie.
20GB for $2.99/month
20 / 5 = 4 > $2.99
Therefore it is probably too good to be true, or there is some catch.

Ofcoarse there are many other conditions, but that is a major one that you can tell right off the bat.

If they sell for a price that is too low, then most likely they will loss money when you use your alloted bandwidth limit.