Basically, with a proper reseller account you are allocated a set amount of quotas. Lets say that you are allocated 1GB space and 10GB bandwidth.
You take that amount and you create your own packages from that. You then can create/add domains to your account without any input from your host. The biggest advantage is that you don't pay more because you add another client's domain.
Currently you are paying $8.97 a month per client. Lets say you ended up with 50 clients, that works out as $448.50 per month. If you had a reseller package, you could get that same setup for a fraction of that price.
Our current setup works the same as you do it, we don't offer reseller packages. Because of demand from client's though, we are introducing real reseller plans within the next month or so. I'm not promoting our services here (It would be hard when we don't offer the plans yet), I'm just giving you an idea of how things work between both ways and why both are good in different circumstances.
With a few sites you would be probably be cheaper the way you currently do it, but when you get to 3+ sites it would most likely work out cheaper with a real reseller plan.
I do have a few comments about the plans you are using though.
1) Disk:Bandwidth - Find a host with a better disk to bandwidth ratio. 1:3 means that you are very likely to go over your bandwidth quota on even a low traffic site. A more realistic ratio is 1 disk to 10 bandwidth. So for every 100MB of disk space, look for about 1GB of bandwidth.
2) PHP3 - This is outdated. Your host running PHP3 means that they are very likely to be behind on security updates relating to PHP. You are talking about a setup that is at least a few years old.
3) Anonymous FTP - This is why your host offers a dedicated IP addres, or one of the reasons anyway. If you don't use it, there is potential for this to be a security risk that is unnecessary.
The best thing to do is look through the package and see what parts you actually need. Don't be fooled by loads of options that you don't use.
Find a host that offers everything you need and within your budget. Contact the host with presales questions, whether by phone, chat, email or whatever but make sure they are friendly and pretty quick to respond.
Hope this helps
Wullie
Fresh Look - Quality Coldfusion Hosting
The pessimist complains about the wind. The optimist expects it to change. The leader adjusts the sails. - John Maxwell