I would appreciate it if you could explain more about "getting 10-20 virtual accounts at generic hosts".
Can you recommend any generic hosts which offer virtual accounts?
There's not much to it. Say you have 50 decent domains that you're going to build out. Find 5-15 generic mainstream hosts that offer $5-10 a month virtual hosting accounts. Look up the reviews on Google, webhostingtalk etc to make sure you're not about to sign up to a shitty one.
Divide your domains up randomly between the hosting accounts, add them to each host and build your sites. Try not to link between sites on the same hosting account, and randomly crosslink the rest of your domains across hosts. The emphasis is on
random and not in any circular or highly structured manner. Try to keep the links sparse and non-reciprocal.
Really backlinking from your own network is of limited value - it's really just to spread the link love around a bit amongst your own sites and distribute it a bit more evenly. Most of your link juice has to come from proper external links from outside the network. If you sit down with a calculator and the original Pagerank papers you will be able to see why.
The exception to this would be when you, say, go out and buy a whole bunch of established domains, rehost them as is, and stuff them with links to your money site. But in this case, the domains already have substantial pre-existing link juice that you're leveraging. You can see a lot of people doing this in the pharm serps at the moment.
The real value of multiple hosting accounts is that, if you have covered your other footprints as much as you can, it insulates you somewhat from bannings and downtime. If you have 20 hosting accounts, if one goes down you're not going to take much of a hit. If you have one single dedicated server with 100 / 500 / 1000 domains on it, and it goes down, your income drops to zero instantly.
Sites should be like terrorist cells. If one goes down (banned, expires and you forgot to renew it, host goes down, DMCAd etc) then the others shouldn't be affected. Personally I do absolutely minimal crosslinking between my own sites - each site is basically an island, but with extensive external backlinking.
No recommendations of hosts, it doesn't really matter who you use as long as they look reputable and have good reviews.